European firms optimistic about Vietnam’s trade and investment environment

Processing clams for export - Illustrative image (Photo: VNA)

European companies ended 2021 more positive and optimistic about Vietnam’s trade and investment environment, according to the Business Climate Index (BCI) announced by the European Chamber of Commerce in Vietnam (EuroCham) on January 27.

The BCI reached the highest point following the fourth wave of COVID-19 infections, with positive sentiment reaching 61 points, a jump of 42 points since the third quarter of 2021 after the end of lockdowns and the re-opening of normal commercial operations.

The BCI remains below its pre-pandemic peak. However, it is clear evidence that confidence is returning to the market.

As many as 58 percent of European business leaders are now anticipating economic stabilization and growth in the first quarter of 2022, while only 17 percent of those predict a deterioration.

European enterprises are also more confident about the prospects of their development in this post-pandemic ‘new normal’.

Up to 43 percent of European businesses surveyed plan to increase their investment in the first quarter of 2022 compared to just 17 percent three months ago.

Likewise, 38.5 percent intend to increase their headcount, while 51.5 percent are predicting a rise in orders and revenue.

EuroCham Chairman Alain Cany said European business leaders welcome the return to life as normal and business as usual, and in particular the easing of entrance requirements for vaccinated foreigners who live and work here.

According to Cany, almost 90 percent of EuroCham member companies reported that previous restrictions had an impact on their commercial operations. So, this new regulation will help to improve the business environment and increase the confidence of business leaders still further.

However, he noted that some sectors remain at risk of falling behind in the race to recover post-pandemic.

Tourism - one of Vietnam’s spearhead economic sectors and which is responsible for millions of jobs - remains restricted to guided tours, and this is keeping the brakes on economic growth, he said.

Therefore, EuroCham encourages the Vietnamese Government to go further and faster in re-opening - at least in areas with high vaccination rates - so that Vietnam can achieve its full potential as a leader in this and other industries and attract more foreign investment in 2022.

According to Thue Quist Thomasen, CEO of YouGov Vietnam, the BCI shows that confidence and optimism are returning as companies get back to work. European businesses are planning to increase their staffing levels, investment plans, and revenues as a result now that the pandemic is back under control.

The BCI is a regular barometer of how European business leaders see the trade and investment environment in Vietnam and the prospects of their own enterprises. Each quarter, the chamber asks its members to answer a range of questions covering issues such as their investment plans, revenue projections, and workforce levels. Since 2020, the BCI survey has been conducted by YouGov Vietnam./.