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» The Business Confidence Index increased slightly in the Fourth Quarter of 2020 (compared to quarter III / 2020)
On January 19th 2021, Vietnam World Vest Base Financial Intelligence Services Company Limited (WVB FISL) announced the result of the survey about WVB Business Confidence Index in the Fourth Quarter of 2020.
WVB FISH Ltd. conducts the survey quarterly. Main objects of the survey are companies which have the most well- known brand, the largest number of Total Assets, Total Revenues and Employees. Being performed from the middle of December 2020 to the middle of January 2021, the survey attracted 163 Companies which active in many fields in Vietnam, such as, construction, agriculture, forestry, electronics, trading, telecommunications, services… Nearly half of these businesses represented for Small and Medium enterprise sector.
According to the survey resulted, the business confidence index (BCI) in the fourth quarter of 2020 reached 102 points, an improvement compared to the third quarter of 2020 (99 points), but still relatively low compared to the same period last year - the fourth quarter of 2019 (134 points) and other quarters in 2019. This index shows that Vietnamese businesses are more optimistic about the current economic situation. Most businesses believe that Vietnam's economy has been and will recover better. Besides, there are also many enterprises that believe that the current economy has many fluctuations and it is difficult to predict due to the volatility of the global economy, variant Covid -19 and risks in trade defenses and lawsuits in 2021.
Summary of investigation results of 6 components building Business Confidence Index (BCI) in the Fourth quarter of 2020 as follows:
- On the general economic situation of Vietnam today: Only 31.29% of enterprises participating in the survey said that Vietnam's overall economy is now better than 12 months ago, 44.17% of enterprises said that economic conditions of Vietnam remained the same. 24.54% of enterprises said that economic conditions were somewhat worse than 12 months ago.
- Prediction of Vietnam’s general an economic situation in the next 12 months: 50.92% of businesses believe that within the next 12 months, Vietnam's economy will be better, 0 20 40 60 80 100 120 140 160 Q3_2008 Q2_2019 Q3_2019 Q4_2019 Q2_2020 Q3_2020 Q4_2020 Business Confidence Index Business Confidence Index 36.2% of businesses rated it as the same, only 12.88% felt pessimistic about the economy in the coming time
Vietnam Economic Report in 2020 and Prospectation of 2021: Innovations for Adaptation, published by the Central Institute for Economic Management (CIEM) on January 15th 2021 forecast to grow 5.98% under Scenario 1, and 6.46% under Scenario 2 in 2021. The first advantage to mention is that the Government maintains low interest rates. The continuously reduced deposit rates from the beginning of the year until now are expected to give banks more room to further reduce lending rates. 37.21% of the enterprises interviewed said that low interest rates create good conditions for enterprises and people to access credit more easily, promote economic recovery, realization of dual goals required by the Prime Minister; 44.19% of the enterprises believe that reducing interest rates to access capital will increase the supply of credit and banking services to customers, improve the business performance of banks themselves.
To speed up the immediate economic recovery after the crisis, the draft document of the XIII Congress of the Communist Party of Vietnam identifies three directions and tasks of socioeconomic development will be focused on implementation in the period of 2021-2030: Firstly, focus on perfecting and improving the quality of the socialist-oriented market economy institutions. Secondly, strongly development in science, technology and innovation. Thirdly, promote economic restructuring associated with innovation growth model.
- Plans to use employees : 25.77% of businesses plan to increase their human resources; 56.44% is expected to stay the same and 17.79% of businesses will reduce the number of manpower in the coming time
- Investment plans for fixed assets: 22.7% of businesses plan to increase their human resources; 55.21% is expected to stay the same and 22.09% of businesses will reduce the number of manpower in the coming time
Facing the consequences of the pandemic, The Government has launched a website to support businesses to deal with Covid-19, which officially came into operation at https://hotro.vibonline.com.vn from December 8th 2020, the Research and Development Department. The private economy proposes a 30% reduction in corporate income tax for all businesses by 2020 ... According to enterprises on the effectiveness of the website, 45.24% of enterprises believe that policies are made timely and practicaly, as a support and rescue for businesses to cope through the most difficult times in a pandemic, 40.48% of businesses said that website help increase connections between businesses, access to mechanisms, policy are essential support for businesses to overcome the difficult period of Covid-19. About the reduction in corporate income tax for all businesses by 2020, 35.56% of enterprises surveyed said that reducing corporate income tax rate is necessary to help businesses alleviate difficulties and reduce tax burden; 53.33% of businesses said that reducing corporate income tax rates will help businesses have more financial resources to expand production and business, contributing to improving competitiveness and attracting investment.
Close coordination between the government, businesses and other economic sectors in the whole society will be the prerequisite for policies to be promoted in the most effective way. Facing with "double difficulties", both shortage of input materials and a sharp decline in output market, 52.38% of surveyed enterprises have restructured in the direction of increasing localization rate, looking for opportunities participating in newly formed supply chains, 38.1% of enterprises making good use of digital technology launched suitable products to the market's needs. Target unmet needs - new customers who have never served before.
Vietnam is one of the few countries with positive growth, top 10 highest growth countries over the world in 2020. All industries have strong growth compared to the previous year, except tourism: E-commerce increase 46%, transportation and food increase 50%, online communication increase 18%... Investment in the internet sector in Vietnam increase explodely, 151 transactions with a value of 935 million USD. The World Bank’ s experts said that the Government of Vietnam has accelerated its efforts in the period from March to November 2020, by increasing by 11 times the number of online public services integrated into the National Service Portal. The World Bank appreciate that the above moves towards deeper integration into the world economy and digitization, completely suitable for the socio-economic development strategy in the coming period (2021–2030).
- The belief in revenue growth: 56.44% of enterprises participating in the survey believe that their revenue will increase higher in the next 12 months; 34.36% of businesses think that their revenue will stay the same and 9.2% are concerned about their revenue decline in the future
- The belief in profit growth: 57.67 % of enterprises believe that profits will increase next year; 30.06% of businesses think that profits will stay the same and 12.27% of businesses worry about the decline in profits in the next 12 months
Vietnam will start the year 2021 with an important political event. The XIII National Congress of the Communist Party of Vietnam is scheduled to take place from January 25th to 2rd February 2021. The every five years National Congress of the Communist Party of Vietnam will select the new leadership of the country and set socio-economic goals for the next 5 to 10 years. Regardless of the outcome of the leadership reform, economic policy is expected to be consistent and not likely to change significantly. There are many reasons to believe that Vietnam's strong development momentum will continue. On the foreign side, Vietnam's trade will benefit from many free trade agreements (FTAs) that Vietnam signed in 2020, including EVFTA, RCEP and UKVFTA. Lower tariffs and more open access to major markets will provide Vietnamese exporters a comparative advantage and help diversify their export destinations.
According to the World Bank (October 2019), the Vietnam Favorable Business Environment index for 2019-2020 ranked 70th out of 190 countries. According to the World Economic Forum (WEF) on October 2019, Vietnam's Global Competitiveness Index in 2019 ranked 67th out of 141 countries (up 10 places compared to 2018). With the successful control of the Covid-19 epidemic, Vietnam is highly appreciated by the international community and has become a safe and attractive investment destination for foreign investors.
|1||Current condition of economy||106.75%|
|2||Prediction of economic condition||138.04%|
|3||Prediction of extent of change in labor||107.98%|
|4||Plans to invest in fixed assets||100.61%|
|5||Prediction of revenue growth||147.24%|
|6||Prediction of profit growth||145.04%|
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