60 per cent of foreign companies in Vietnam report losses in 2011

Jan 11, 2012, 4:47 GMT

Hanoi - Sixty per cent of foreign-invested enterprises in Vietnam reported losses last year, due to national inflation and a slump in global consumption, authorities said Wednesday.

The statistics were recorded in a survey of 1,700 companies in 17 cities and provinces by the Labour and Salary Department, Tong Thi Minh, director of the department, told dpa.

The companies said they suffered losses due to the domestic economic crisis and global uncertainties.

Vietnam's inflation hit 18.6 per cent last year, the highest level in Asia, while European countries were struggling with a sovereign debt crisis.

Economists said if more foreign-invested enterprises reported losses it would affect foreign direct investment (FDI).

FDI continued its downtrend for a second year. Vietnam attracted a total of 14.7 billion dollars in promised investments in 2011, down 26 per cent on-year, the Ministry of Planning and Investment said.

Total FDI paid out in Vietnam was estimated at 11 billion dollars last year, slightly down compared to the previous year.

FDI is one of the country's major sources of foreign currency, together with export revenues and overseas remittances. It accounts for around 25 per cent of capital investment, the authorities said.

Economists said they feared the economy and employment would be badly affected. The FDI sector employs around 2 million workers and creates jobs for millions of others indirectly.