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Business optimism declines in Vietnam despite global uplift
Business optimism in Vietnam fell dramatically in the first quarter even as improving optimism in major economies offers hope for global recovery, according to accounting and advisory firm Grant Thornton.
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| Vietnam’s business optimism dropped to a low 6 percent in the first quarter |
There was an increase in optimisim in the Asia-Pacific region, from -9 percent to 2 percent, but the improvement is not reflective of Vietnam, according to the company’s quarterly survey of 3,000 businesses in 40 countries.
Vietnam’s optimism dropped from 34 percent in the last quarter of 2011 to 6 percent in this year’s first quarter, despite a reduction in trade deficit, the company said.
“Lender support, cost of finance, lack of skilled labor, access to finance and red tape continue to be the major hurdles to improving confidence in Vietnam,” said Ken Atkinson, Managing Partner of Grant Thornton Vietnam. “It is disappointing to see the trend in Vietnam does not match the positive uplift in confidence around the world.”
However, he noted that government policies appear to be working with a steady decline in inflation, a reduced trade deficit, and a stable currency.
“This, together with the likely decline in interest rates should help rebuild business confidence in the second quarter and beyond,” he added.
Around the world, business optimism increased over the last three months driven by improved revenue and demand prospects.
Grant Thornton said the improving situation in the leading industrial countries of G7 has seen the global business optimism average rise to 19 percent in the first quarter, up from 0 percent the previous quarter.
But the company also warned that, despite the pick-up, businesses still remain less optimistic than they were this time last year, underscoring the fragile state of the global economic recovery.
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