European firms’ confidence in Vietnam’s business environment slightly declines but still strong: EuroCham

At An Phu Printing and Garment Co., Ltd., in Hung Yen province (Photo: VNA)y

HCM City (VNA) – The confidence ofEuropean enterprises in Vietnam’s investment and business environment slipped further to 62.2 percentagepoints in the wake of a worsening global economicdownturn but still remains strong, according to the recent Business Climate Index(BCI) survey published by the European Chamber of Commerce (EuroCham) in Vietnam.

The survey, produced by YouGovDecision Lab, said that although Vietnam's economy grew at a record 13.67%year-on-year in the third quarter of 2022, the BCI declined for the secondconsecutive quarter, dropping 6.4 index points from the second quarter and 10.8points from the first quarter.

The result were attributable to instability ofthe global economy due to the escalating conflict in Ukraine, persistentinflationary pressures, a labour shortage worldwide, and stagnant global growth.

However, in the midst of the current global economicuncertainty, the BCI is still 10.2 points higher than its pre-pandemic level of52.0 in the fourth quarter of 2019, and 1.2 points higher than the fourthquarter of 2020, when Vietnam was easing its pandemic-related restrictions.

According to EuroCham Chairman Alain Cany, Vietnamoffers great investment opportunities for European businesses, especially prospectsin the medium- to short-term.

Through the EU-Vietnam Free Trade Agreement(EVFTA) and EU’s shared commitment to sustainable development, Vietnamese andEuropean companies have a great deal of growth potential, he said.

These BCI results are encouraging, he said,adding that Vietnam will certainly be in a better position in two or threeyears, demonstrating its place among the most exciting and dynamic business andinvestment destinations.

Meanwhile, CEO of Decision Lab Thue QuistThomasen said a worsening global economic environment istaking its toll on the optimism amongst European business leaders in Vietnam. However,by curbing inflation, improving credit ratings and continuing GDP growth,Vietnam’s story stands out as less pessimistic globally as companies plan andlook forward to 2023.

The BCI is the leading indicator of theEuropean business and investment community in Vietnam. To betterunderstand the Vietnamese market, EuroCham invites its more than1,200 members, representing virtually every sector of the Vietnamese economy,to provide quarterly updates on Vietnam's business environment and forecastsfor their own businesses in Vietnam./.

VNA