Number of businesses leaving market down over 80% in February

The February number of enterprises temporarily leaving market declined by 80.1% against last month to nearly 3,600, while those waiting to complete the dissolution process also decreased by 53.5%.

Production of electricity equipment at A Chau Industry Company in Quat Dong Expansion Industrial Park. Photo: Thanh Hai

“These are positive signs for the economy amid the current serious Covid-19 situation that is having negative impacts on enterprises’ operation,” stated the General Statistics Office (GSO) in its monthly-report.

While the number of new business formation last month declined by 20.3% against January to 8,038, for which the statistics agency attributed the decline to the week-long Tet holiday in February, the total number in the first two months rose by 4% year-on-year to 18.100 with registered capital of a combined VND334.8 trillion (US$14.53 billion), up 52.2%.

Average registered capital per newborn enterprise was VND18.5 billion (US$803,000) during this period, up 46.4% year-on-year.

The government-run office informed that 11,000 enterprises resumed operations in the period, a decline of 7.6% inter-annually, bringing the total number of newly-registered and reinstated enterprises in the two-month period to 29,200.

The GSO added that the number of laborers hired by newly-established enterprises in the first two months of this year was 172,800, up 9.7% against the same period last year.

Consumer spending rises 5.49%

The long Tet holiday break and the Covid-19 outbreak in a number of cities/provinces in February led to a decline of 5.4% month-on-month on the total retail sales of consumer goods and services to VND439.7 trillion (US$19.07 billion).

However, total consumer spending in the first two months remained positive with a growth rate of 5.49% year-on-year to VND904.5 trillion (US$39.24 billion).

8-year high cost of living

The consumer price index (CPI), the main gauge of inflation expanded by 1.52% against the previous month, the highest rise in a second month in the last eight years.

The end of the electricity charge subsidy scheme from Vietnam Electricity (EVN), the country’s sole power distributor, and higher food and transportation costs during the Tet holiday were seen as major factors leading to higher CPI growth, stated the GSO.

However, the CPI for the first two months declined by 0.14% year-on-year, leading to a modest growth of the core inflation by 0.64%.

The expansion of CPI in February was mainly thanks to a growth of 4% year-on-year in prices of housing and construction materials, contributing to 0.75% of the overall growth, followed by food and catering services (1.61%), and transportation (1.55%).

While the international gold prices as of February 24 declined by 2.7% against the previous month, as investors became more optimistic with global economic outlook, domestic gold prices continued the upward trend by an increase of 0.25% month-on-month in February.