According to the Business Climate Index (BCI), the European Chamber of Commerce in Vietnam (EuroCham), European companies ended 2021 more optimistic about Vietnam’s investment and trade environment than they were in 2021, according to EuroCham.
The Chamber reports that the BCI reached its highest point following the fourth wave. Positive sentiment reached an astounding 61 points. This is a jump of 42 percent since quarter three 2021. Business leaders were happy to see the end of lockdowns lifted and normal commercial operations resumed. The BCI still remains below its prepandemic peak. It is clear that confidence is returning in the market.
The BCI is a reliable barometer of European investors and business leaders. Each quarter, EuroCham asks its over twelve hundred members – including business leaders and investors in all sectors and industries – for their perceptions of Vietnams trade and investment environment and their predictions for the prospects of their own companies. YouGov Vietnam has been conducting fieldwork for the BCI since 2020.
More than half (58%) European business executives now expect economic stability and growth in quarter 1 of 2022. This is an eight-point increase in optimism. Meanwhile, less than one in five (17%) now predict a deterioration – a figure which has almost halved since the last BCI.
Business leaders are also more optimistic about their businesses’ prospects in the new post-pandemic normal. 43% intend to increase their investment for the first quarter 2022, as opposed to 17% just three months ago. Likewise, more than one-third (38.5%) intend to increase their headcount – up around 15% – while over half (51.5%) are predicting a rise in orders and revenue, a rise of 7.5% compared to quarter three.
Alain Cany, EuroCham Chairman said:
These figures are a vote for confidence in Vietnam’s trade and investment climate now that the pandemic has been under control. They also reflect the government’s clear direction to us on how we can live with it.
Business leaders are happy to see the return of normal life and business as usual. They also welcome the relaxation of entry requirements for foreigners who have been vaccinated and who work and live here. Nearly 90 percent of our members stated that previous restrictions had a negative impact on their business operations. This new regulation will improve the business environment and increase confidence among business leaders.
However, certain sectors are still at risk of being left behind in the race for recovery after the pandemic. Tourism – one of Vietnams spearhead economic sectors and one which is responsible for millions of jobs – remains restricted to guided tours, and this is keeping the brakes on economic growth. Therefore, we encourage the 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.
EuroCham has more information about the subjectHere
