High confidence on business climate

European firms’ confidence in Vietnam has continued to increase, reaching the highest level since the fourth Covid-19 outbreak in April last year.

According to EuroCham’s latest Business Climate Index (BCI) report, the BCI in Q1 this year reached 71, up 12 points from Q4 2021. The report said firms viewed the current “new normal” and less severe Omicron variant as manageable, which has allowed businesses to resume faster after a gloomy 2021, resulting in an increasing BCI in Q1. The BCI is expected to sustain this improving trend in Q2, with members more optimistic about the business outlook. More than two-thirds of business leaders believe in the likelihood of a thriving economy in the next three months, and only 5% expect future economic declines. The leaders are more buoyant with the current improving scenario as business perceptions are recovered according to the economy’s pace, with operations entirely back to the new normal in significant hubs of the country.

In addition, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to boost trade and investment on both sides and help the Southeast Asian economy further integrate into the global economy and the international community.

In particular, the BCI for the first time has surveyed the assessment of European businesses about the future green development in Vietnam, with more than 82% of respondents showing confidence in this area. Alain Cany, EuroCham chairman, said Vietnam had an opportunity to attract green, high-quality foreign direct investment (FDI) from European investors seeking a safe, competitive destination. Green development will be the main theme of Euro Cham activities throughout 2022, with the Green Economy Forum and Exhibition 2022 as the focus.

The Business Climate Index is a regular barometer of the business sentiment among European companies operating in Vietnam. The BCI is the result of the quarterly survey of 1,200 leaders of European businesses who are members of EuroCham.