EuroCham: European businesses optimistic about Vietnam's economic growth

NDO - The Business Confidence Index (BCI) recently announced by the European Chamber of Commerce in Vietnam (EuroCham) shows strong confidence of European businesses in the Vietnamese economy .

European businesses are optimistic about Vietnam's economy. (Illustration photo: THANH DAT)

Growth boosts confidence On April 8, the EuroCham BCI update showed that the quarterly BCI increased sharply by 6.5 points to 52.8 points in the first quarter of 2024 - the highest level since 2022 - a clear sign of growing confidence among the European business community in Vietnam's economic growth. Accordingly, European businesses expressed optimism about Vietnam's economy in both the short and long term. One-third of businesses felt optimistic about the second quarter's prospects, with sentiment turning positive in the upcoming quarter for the economy as a whole. The level of optimism increased by 6 points compared to the previous quarter to 45%. More than half of the businesses surveyed predicted higher orders and revenue in the second quarter of 2024, while 40% of businesses planned to expand their workforce.

Graphics: TRUNG HUNG

In addition, the BCI report shows that the number of businesses planning to cut spending in the next quarter, now down to 15% compared to 23% previously, shows that investment confidence has increased. Looking at the long term, this optimism is reinforced, with 71% of businesses feeling positive about the long-term prospects in Vietnam over the next five years. The report notes that while economic uncertainties, real estate difficulties and supply chain risks pose challenges, the data shows that European businesses remain optimistic about the short-term recovery and long-term prospects in Vietnam's emerging market. "This positive trend underlines the European business community's view of Vietnam as a dynamic market with excellent growth prospects," said EuroCham Chairman Dominik Meichle.

The BCI has once again risen above the 50 threshold, confirming Vietnam’s growing attractiveness. Efforts to improve stability and predictability will further enhance Vietnam’s global competitiveness and help it reach its full potential. EuroCham Chairman Dominik Meichle

The index has once again risen above the 50 threshold, confirming Vietnam’s growing attractiveness. Efforts to improve stability and predictability will further enhance Vietnam’s global competitiveness and help it reach its full potential, EuroCham Chairman emphasized. Mr. Thue Quist Thomasen, Managing Director, Decision Lab   - BCI survey agency said: “BCI data paints a clear picture - investor optimism is steadily improving. Vietnam certainly has the potential to become a preeminent investment destination in the region and proactive, investor-focused policies will further accelerate Vietnam’s development”. European businesses encourage investment in Vietnam European businesses signaled a high likelihood of recommending Vietnam as a top investment destination. Significantly, 54% of surveyed businesses indicated a high likelihood of recommending Vietnam to other foreign businesses, with a readiness score of 8 or higher out of 10.

Graphics: TRUNG HUNG

This underlines Vietnam’s growing appeal to the European business community, while also suggesting the potential for further growth. Vietnam’s highly skilled workforce is also a major draw for European investors, with 75% of EuroCham members hiring 76% or more of their staff locally, according to the report. EuroCham noted that while the BCI survey for Q4/2023 found that 40% of businesses rated the workforce as average, the strong hiring trend indicates a solid talent base for future growth. However, European businesses also mentioned constraints such as regulatory barriers, administrative burdens, difficulties with permits and licensing, and barriers to work visas. To help Vietnam attract more foreign investment, European businesses made a number of recommendations, including streamlining procedures, strengthening a clear and consistent legal framework to create a favorable investment environment, and improving infrastructure to support trade and logistics. The EuroCham Chairman said that Vietnam has great economic potential and addressing legal challenges is key to fully realizing that potential. Simplifying procedures and establishing more transparent regulations will help both Vietnamese and foreign businesses succeed. This will help Vietnam become a leading investment destination in the region, benefiting domestic businesses, attracting international capital and strengthening economic partnerships.

Nhandan.vn

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