- News in Vietnam
- 11 February 2022
43% of European businesses in Vietnam plan to increase investment in the first quarter
European businesses ended 2021 with a more positive and optimistic spirit about Vietnam’s the trade and investment environment, based on the Business Climate Index (BCI) results. ) from the European Chamber of Commerce in Vietnam (EuroCham).
The BCI index has reached its highest level since the fourth epidemic wave broke out, with 61 percentage points – up 42 points compared to Q3 2021, after social distancing ends and commercial activities begin, back to normal. Currently, the BCI index remains below its pre-pandemic peak. However, they can see that the confidence of businesses is gradually returning.
More than half (58%) of European business leaders are now predicting economic stability and growth in the first quarter of 2022, up 8 points from the previous period.
Meanwhile, less than a fifth (17%) predict a decline – this number has almost halved since the last BCI results.
BCI is a frequent measure of European investors and business leaders. Every quarter, EuroCham conducts a survey of more than 1,200 members – including business leaders and investors in all fields – about Vietnam’s trade and investment environment and its forecast for their companies growth prospects. As of 2020, the BCI Survey is conducted by YouGov Vietnam.
Business leaders are also more confident about the prospects for business development in this “new normal” period. As a result, 43% plan to increase investment in the first quarter of 2022, compared with just 17% three months ago.
Similarly, more than a third (38.5%) plan to increase their headcount – an increase of about 15% from the previous period. More than half (51.5%) of survey respondents predicted an increase in orders and revenue, an increase of 7.5 percentage points from the third quarter.
Commenting on the BCI, EuroCham President Alain Cany said: “These latest figures are a vote of confidence in Vietnam’s current trade and investment environment when the pandemic is under control again as well as following the precise direction of the Government that we learn to live with the virus.
Business leaders welcome the return to life and business, especially the relaxation of entry requirements for vaccinated foreigners to live and work in Vietnam.
Almost 90% of our member companies report that previous restrictions have affected their commercial activities. Therefore, this new regulation will help improve the business environment and enhance business leaders’ confidence even more.
However, some industries are still at risk of falling behind in the race to recover from the pandemic. Tourism – one of Vietnam’s key economic sectors and the one that generates millions of jobs – is still restricted to guided tours, holding back economic growth.
We, therefore, encourage the Government to go further and faster in reopening – at least in areas with high vaccination rates – so that Vietnam can reach its most significant potential economic recovery and attract more foreign investment in 2022″.
And Thue Quist Thomasen, Managing Director of YouGov Vietnam, added: “Our data shows that confidence and optimism are returning as companies are allowed to operate normally. European businesses plan to increase human resources, investment plans, and revenue as the pandemic is now under control.
“The challenge now is to capitalize on this positive mentality and ensure that businesses in all sectors and industries can operate to their full potential. In doing so, European businesses will be able to make the largest possible contribution to Vietnam’s economic growth by 2022.”
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