Vietnam businesses remain highly optimistic: global report

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Two-thirds of businesses in Vietnam have adopted a stronger focus towards the domestic market since the global financial crisis broke out, a new report says.

The latest Grant Thornton International Business Report (IBR), which surveyed over 11,500 businesses in 40 economies around the world, focuses on the experience of businesses and their expectations for the next 12 months.

In Vietnam, 200 businesses across multiple industries and sectors were surveyed.

The report found domestic businesses are optimistic about the economy over the next 12 months, although less so than in 2010.

Business expectations for revenue remain high, at 91 percent while the Asia-Pacific business average is much lower at 53 percent.

Ninety percent of local businesses expect to increase profits in 2012, well above the Asia Pacific average of 37 percent.

The cost of finance, around 59 percent, was cited as the most pressing constraint on expansion by businesses in Vietnam this year, significantly higher than the Asia-Pacific business average of 31 percent.

A shortage of orders/reduced demand is also a significant worry for 50 percent of local businesses as it is across for 47 percent enterprises in the Asia-Pacific region.

Around 19 percent of businesses in Vietnam believe that lenders are unsupportive of their business, far higher than the average across the Asia-Pacific region as a whole, only 4 percent, the report found.

It predicted that in 2013-2016, a more helpful global environment can see the country hit an average growth rate of 7.3 percent per year, assuming the government and central bank can get a handle on inflation.

Remittances from Vietnamese overseas are expected to remain robust in the medium term, boosting private consumption, the report said.