At the conference on August 11, MPI Minister Dung said that thanks to the control of the pandemic and the maintenance of macroeconomic stability, the business sector has reported a positive recovery recently.

As of July, the whole country had about 871,000 operating enterprises with tax incurred, an increase of nearly 13 per cent compared to 2021.

In the first seven months of 2022, the number of enterprises entering and returning to the market, as well as additionally registered capital into the economy, increased sharply.

The number of enterprises entering and re-entering the market was over 130,000 enterprises, an increase of 26.8 per cent on-year, 1.4 times higher than the number of enterprises withdrawing from the market. The total registered capital added to the economy in the first seven months of 2022 reached over $143 billion, an increase of over 37 per cent on-year.

According to reports from business associations, the market has recovered over 75-85 per cent compared to the time before the pandemic. Revenue in the first two quarters of 2022 increased sharply on-year, some of them were even higher than the same period before the pandemic.

The domestic air transport and tourism markets recovered nearly fully and 85 per cent respectively, especially in the second quarter. Export turnover continued to increase sharply, continuing to be a bright spot, significantly contributing to economic growth. In the first seven months of 2022, export turnover of goods was estimated at $216.35 billion, up 16.1 per cent on-year.

Minister Dung said that the confidence of investors and businesses continues to go up. Nearly 92 per cent of enterprises responded to keep their business scale or expand in the third quarter of 2022, while 85 per cent of processing and manufacturing enterprises expected that their production and business situation in the third quarter will be stable and get better than the second quarter.

Minister Dung at the conference between the prime minister and businesses

Five challenges

However, Minister Dung also noted, that Vietnamese enterprises are still weak and lacking in both quantity and quality.

"The number of newly-established enterprises and those returning to operation increased significantly but the rate of enterprises dissolved or stopped operating was still high. Besides this, the number of medium and large-sized enterprises is very low, and their scales are still too small compared to other countries in the region and the world. The majority of enterprises in our country are micro-, small-, and medium-sized, accounting for nearly 98 per cent of the total, in addition to being weak in innovation and technologies," said the minister.

Through the comments of business associations, in the last months of the year, they see a lot of burdens in five groups of issues:

First, the high price of gasoline, raw materials, and other input materials increases production and business costs, raising the cost of construction packages by 18-30 per cent and logistics costs by 3-5 times. The rise in costs was higher than the increase in revenue in the second quarter of 2022 compared to the previous quarter and the same period last year.

Second, the shortage of labour in some sectors and localities, and the regulation on increasing the regional minimum wage also put more pressure and expenses on businesses, especially in labour-intensive industries.

Third, accessing credit and mobilising capital for production and business is still one of the major difficulties for enterprises.

Fourth, there is adverse volatility on both the supply and demand sides. In some industries, the supply of components is not enough to serve production, while in some other industries like textiles, it is forecasted to reduce orders from overseas markets in the next months due to a sharp decrease in the purchasing power, and raising inventory.

Fifth, a number of legal obstacles and barriers that have existed for a long time, have not been thoroughly resolved, hindering and obstructing investment, production and business activities. Further, environmental regulations in aquatic production and processing, standards on fire prevention, and regulations on corporate bond issuance are still inadequate.

“This is also an issue that the business community repeatedly claimed in previous meetings between the prime minister and businesses, and they expect to resolve it as soon as possible. However, we have yet to resolve substantively and thoroughly," said Minister Dung.

"This practice has posed a great demand for all of us: We have to act as soon as possible to proactively overcome challenges and turn risks into threats," the minister emphasised.

From an international perspective, Vietnam's prestige and position are being enhanced. New free trade agreements open up great advantages for Vietnamese enterprises to participate in global value chains, along with the movement of foreign investment capital flows and the digital and green economy, creating new consumption trends and new business models.

“Therefore, we need to utilise every opportunity to overcome the biggest challenges, proactively adapt, and seize opportunities to develop sustainably and gain greater values," the minister said and proposed numerous solutions for the short and long term.