Optimism in the economy suffered a second successive fall in the thirdquarter in Vietnam , a global survey by auditing and consulting firmGrant Thornton has found.
The International BusinessReport poll of more than 2,700 businesses in 39 economies inAugust-September found that only 38 percent of Vietnamese respondentswere optimistic about the economic outlook for the next 12 months,compared with 54 percent last quarter.
"In Q1/2011, theGovernment took some strong decisions in the management controls ofmonetary and financial policy, especially to reduce interest rates andincrease credit growth," Ken Atkinson, managing partner of GrantThornton Vietnam , said.
"Whilst these are beginningto have an effect, it is the first time in my 20 plus years here that Ihave seen so many Vietnamese business owners pessimistic about thefuture."
The country experienced a welcome slowdown ininflation in Q3 (July – 1.17 percent, August – 0.93 percent, andSeptember – 0.82 percent), which suggests the worst may be over.
"Whilst there has been a certain amount of de-stocking, businessesgenerally are suffering from the burden of high borrowing costs (72percent) and shortage of working capital (50 percent)," he added.
Wage increases seem set to continue to add to the inflationary pressurewith 70 per cent of respondents indicating salary and wage increasesover the next 12 months would be in line with or above inflation.
The report lays bare the dramatic impact of economic uncertainty and financial instability on the global business community.
It reveals that net global business optimism has collapsed from 31 percent to just 3 percent.
Ominously, this uncertainty has also spread to key emerging markets,with both China and India seeing net optimism decline by 29percent.
The optimism of business owners in mature marketshas been hit particularly hard; in North America , optimism hasdropped from 43 percent to 3 percent, and in the EU, from 34 percent tozero.
Ed Nusbaum, CEO of Grant Thornton International,said: "These figures are the worst since 2009, when we were in the midstof the global recession. The worrying thing is that negative sentimentabout the wider economy is now damaging business growth prospects.
"Businesses, particularly in developed countries, are telling us theyfeel they have no control over how things are going to turn out. There'sa perception that attempts to create stability and stimulate growthjust have not worked. An economic outlook that appeared to be improvingjust three months ago has been replaced with one of total uncertainty."
The prospect of businesses driving growth is being constrained by theon-going uncertainty, especially in many mature markets wheregovernments and consumers are reining in spending.
Globally, business expectations for employment, revenue, and profitshave fallen by 11, 10, and 9 percentage points respectively.
In Vietnam the corresponding figures are 10 percent for employmentand 6 for revenue but 14 percent of respondents expect a decrease inprofits. /.
The International BusinessReport poll of more than 2,700 businesses in 39 economies inAugust-September found that only 38 percent of Vietnamese respondentswere optimistic about the economic outlook for the next 12 months,compared with 54 percent last quarter.
"In Q1/2011, theGovernment took some strong decisions in the management controls ofmonetary and financial policy, especially to reduce interest rates andincrease credit growth," Ken Atkinson, managing partner of GrantThornton Vietnam , said.
"Whilst these are beginningto have an effect, it is the first time in my 20 plus years here that Ihave seen so many Vietnamese business owners pessimistic about thefuture."
The country experienced a welcome slowdown ininflation in Q3 (July – 1.17 percent, August – 0.93 percent, andSeptember – 0.82 percent), which suggests the worst may be over.
"Whilst there has been a certain amount of de-stocking, businessesgenerally are suffering from the burden of high borrowing costs (72percent) and shortage of working capital (50 percent)," he added.
Wage increases seem set to continue to add to the inflationary pressurewith 70 per cent of respondents indicating salary and wage increasesover the next 12 months would be in line with or above inflation.
The report lays bare the dramatic impact of economic uncertainty and financial instability on the global business community.
It reveals that net global business optimism has collapsed from 31 percent to just 3 percent.
Ominously, this uncertainty has also spread to key emerging markets,with both China and India seeing net optimism decline by 29percent.
The optimism of business owners in mature marketshas been hit particularly hard; in North America , optimism hasdropped from 43 percent to 3 percent, and in the EU, from 34 percent tozero.
Ed Nusbaum, CEO of Grant Thornton International,said: "These figures are the worst since 2009, when we were in the midstof the global recession. The worrying thing is that negative sentimentabout the wider economy is now damaging business growth prospects.
"Businesses, particularly in developed countries, are telling us theyfeel they have no control over how things are going to turn out. There'sa perception that attempts to create stability and stimulate growthjust have not worked. An economic outlook that appeared to be improvingjust three months ago has been replaced with one of total uncertainty."
The prospect of businesses driving growth is being constrained by theon-going uncertainty, especially in many mature markets wheregovernments and consumers are reining in spending.
Globally, business expectations for employment, revenue, and profitshave fallen by 11, 10, and 9 percentage points respectively.
In Vietnam the corresponding figures are 10 percent for employmentand 6 for revenue but 14 percent of respondents expect a decrease inprofits. /.
