Consequences of the recession still haunt Vietnam's economy, as nearly 28,000 enterprises are reported to have shut their doors in the first five months of 2014.

Illustration photo. Nearly 28,000 enterprises stopped operations in Vietnam in the first five months of 2014.

According to a report from the Business Registration Office of the Ministry of Planning and Investment, in the first five months of the year, 31,228 enterprises were established, with over VND173 trillion (USD8.2 billion) in registered capital. However, the number of enterprises that stopped operations is 27,867, an increase of 20.5% compared to same period last year.

In fact, over 18,000 out of 27,867 firms have effectively ceased operations, but have not yet completed the legal procedures to reflect the fact. These companies were included in the report so as to give a realistic view of Vietnam's economic situation. 

The report also pointed out that, even though rescue packages from the government and agencies have shown to be effective, domestic firms still face many difficulties.

According to surveys conducted by the General Statistic Office, private firms have the highest rate of closure, followed by FDI firms and state-ownd enterprises. Of those surveyed, 58.7% of enterprises said they had to shut down because they could not find reliable markets for their products.

Many enterprises said that this year the market is showing signs of more opportunities than last year, but expectations are still not high. Of the enterprises surveyed, 55.8% said they could not make exact assessments of the the supply and demand situation, while 50.5% planned on not taking out business loans.

The Ministry of Industry and Trade and the Chamber of Commerce and Industry of Vietnam are said to have played little role in supplying information to enterprises as far as international markets, having a great impact on the success or failure of domestic firms, particularly those specialising in export.