This morning (July 15), the European Chamber of Commerce in Vietnam (EuroCham) released the Business Confidence Index (BCI) report for the second quarter of 2024, providing a multi-dimensional view of the economic situation of European businesses in Vietnam.
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| (Source: Industry and Trade Newspaper) |
Despite strong GDP growth in the first half of the year, the BCI declined slightly from 52.8 in Q1/2024 to 51.3 in Q2/2024, highlighting the need for continued policy adjustments to maintain growth momentum.
The BCI survey, conducted by Decision Lab and distributed to EuroCham’s network of 1,400 members, serves as a barometer of sentiment among European businesses operating in Vietnam. This quarterly assessment provides real-time insights into the evolving business environment in one of Southeast Asia’s most dynamic markets.
European businesses still believe in Vietnam's long-term growth
Mr. Dominik Meichle, Chairman of EuroCham Vietnam, said that Vietnam's economic potential is undeniable and the European business community remains confident in the country's long-term growth.
“While our survey points out areas for improvement, we believe that by working together to address administrative and regulatory barriers, we can create a more efficient and attractive business environment that benefits both the European and Vietnamese business communities,” stressed the Chairman of EuroCham Vietnam.
Mr. Thue Quist Thomasen, CEO of Decision Lab, commented that the survey results reveal a nuanced picture of the business landscape.
While 68% of respondents said current conditions were moderate to positive, short-term caution has increased slightly and this needs to be addressed for the positive trend to continue.
However, a strong 6.42% Gross Domestic Product (GDP) growth in the first half of 2024 and nearly 70% expressing optimism over the long term indicate strong belief that positive indicators can materialize in the future.
According to the survey, although the general assessment of Vietnam's economic outlook in the third quarter of 2024 is cautiously optimistic (45%), private enterprises are still hesitant about their own prospects. Specifically, 45% expressed neutral opinions and 23% expressed concerns.
This short-term uncertainty is balanced by strong long-term confidence, with nearly 70% of businesses expressing optimism about Vietnam’s economic growth over the next five years. This confidence is reflected in the proportion of businesses that would recommend Vietnam as an investment destination.
While European businesses remain optimistic about Vietnam's potential, the survey highlights persistent legal challenges that hinder growth and investment.
Key issues identified include: Ambiguous regulations that are interpreted in different ways; cumbersome administrative procedures; difficulties in obtaining permits and approvals; visa and permit challenges for foreign workers; duplicate or inconsistent approvals across levels of government.
To attract more FDI from Europe
To attract more foreign direct investment (FDI) and stimulate economic growth, surveyed businesses highlighted five factors that Vietnam can improve its business environment:
First, streamline administrative processes and procedures.
Second, increase clarity in the law to reduce misinterpretation.
Third, develop core infrastructure (roads, ports, bridges...).
Fourth, simplify procedures for granting visas and work permits to foreign experts;
Fifth, ensure political stability and security.
To continue addressing these challenges and promoting sustainable economic activities, EuroCham Vietnam will host the Green Economy Forum and Exhibition (GEFE) 2024 from 21-23 October in Ho Chi Minh City.
The three-day event will include workshops, a green technology exhibition and high-level plenary sessions with European and Vietnamese leaders. The event aims to equip businesses with the knowledge, connections and tools needed to navigate Vietnam’s evolving business landscape while promoting environmentally responsible practices.
Source: https://baoquocte.vn/chu-tich-eurocham-tiem-nang-kinh-te-cua-viet-nam-la-khong-the-phu-nhan-278728.html
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