Vietnam plans to rescue struggling firms

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The Ministry of Trade and Industry is drafting a rescue plan for local businesses as the economic downturn forces many to cut back or stop production, local media reports say.

The plan will focus on helping companies reduce their inventory and access bank loans, news website VnExpress reported, citing Minister Vu Huy Hoang.

Hoang said it is necessary to prevent the trend of narrowing and halting production and create favorable conditions for local firms to grow next year.

"The ministry welcomes suggestions for the plan, which will be submitted to the government in the coming time," he said, without providing a specific date or elaborating on the measures that will be taken.

According to the General Statistics Office, 26,324 companies shut down completely or suspended operations in the first six months, up 5.4 percent from the same period last year.

Hoang said the economy is still facing many challenges, with the inventory index rising 26 percent in the first six months compared to the same period last year and consumption slowing down.

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The State Bank of Vietnam has already cut interest rates five times this year to boost the economy, which expanded 4.38 percent in the first half. Even though banks have been ordered to lower borrowing costs to below 15 percent, many businesses complain that the rates are not low enough.

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