Company closures in Vietnam rose 6 percent from a year earlier in the first quarter due to high borrowing costs and “limited” access to credit, Vu Duc Dam, chairman of the Government Office said today.
“Even as banks reduce interest rates, they remain at a high level and companies still have difficulties borrowing,” Dam said at a regular monthly press briefing in Hanoi.
Closures totaled 11,900 during the period, including 2,200 companies that shut permanently and operating halts by the rest, according to a press release distributed at the briefing.
Gross domestic product rose 4 percent from a year earlier in the first quarter, government data released March 29 showed, the slowest pace since 2009 as bank lending declined and domestic demand weakened.
The State Bank of Vietnam cut its repurchase and refinancing rates by one percentage point last month, and ordered the nation’s four largest banks to lower borrowing costs from as high as 25 percent, seeking to counter a fall of about 2 percent in lending this year.
To contact the reporter on this story: Nguyen Dieu Tu Uyen in Hanoi at email@example.com
To contact the editor responsible for this story: Paul Tighe at firstname.lastname@example.org