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European companies more confident in Viet Nam’s business environment

VGP - European companies ended 2021 more positive and optimistic about Viet Nam’s trade and investment environment, according to the Business Climate Index (BCI) from the European Chamber of Commerce in Viet Nam (EuroCham).

January 27, 2022 9:49 PM GMT+7

The BCI reached the highest point following the fourth wave, with positive sentiment reaching 61 points. That represents a jump of 42 points since the third quarter of 2021, with business leaders welcoming the end of lockdowns and the re-opening of normal commercial operations.

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

The BCI is a regular barometer of European business leaders and investors. Each quarter, EuroCham asks its over twelve hundred members - including business leaders and investors in all sectors and industries - for their perceptions of Viet Nam's trade and investment environment and their predictions for the prospects of their own companies. 

Since 2020, the fieldwork for the BCI has been conducted by YouGov Viet Nam.

Over half (58 percent) of European business leaders are now anticipating economic stabilization and growth in the first quarter of 2022. That represents an eight-point rise in optimism. Meanwhile, less than one-in-five (17 percent) now predict a deterioration - a figure which has almost halved since the last BCI.

Business leaders are also more confident about the prospects of their own enterprises in this post-pandemic 'new normal'. Therefore, 43 percent plan to increase their investment in the first quarter of 2022, compared to just 17 percent three months ago. 

Likewise, more than one-third (38.5 percent) intend to increase their headcount - up around 15 percent - while over half (51.5 percent) are predicting a rise in orders and revenue, a rise of 7.5 percent compared to the third quarter.

These latest figures are a vote of confidence in Viet Nam's trade and investment environment now that the pandemic is back under control as well as in the government's clear direction that we learn to live with the virus, said EuroCham Chairman Alain Cany.

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, he added. 

The government should go further and faster in re-opening - at least in areas with high vaccination rates - so that Viet Nam can achieve its full potential as a leader in this and other industries and attract more foreign investment in 2022, he recommended.