Confidence rises among European businesses in Vietnam, survey shows

By Thanh Nien News, TN News

Thursday, October 23, 2014 20:29 Email Print

A laborer works at a yarn weaving plant of the Ha Nam textile company in the namesake province’s Phu Ly town, about 60 kilometers south of Hanoi. The majority of respondents hold a positive outlook on the future and say that the future FTA will bring a po

Business confidence, outlook and expectations for the future among European businesses in Vietnam continued to rise, according to a survey by EuroCham.

The Business Climate Index (BCI) climbed to 74 in the 3rd quarter of this year, from 66 in the previous quarter, EuroCham said in a press release issued on Oct. 23 about the survey, which was conducted in September.

When comparing with previous quarter the number of respondents that asserted their business situation as positive has seen a slight rise and is now at 48 percent, the largest group of respondents, according to the survey.

The second largest group is respondents that perceive the business situation as neutral. The major change comes from the respondents that perceive the business situation as negative, having declined from 21 percent last quarter to a single digit at 8 percent this quarter. Respondents finding the current business situation to be excellent or very poor were both low, 5 percent respectively.

The expectations on the Free Trade Agreement (FTA) between Vietnam and EU are clearly expressed as the respondents were asked about the outlook of their enterprises. Up to 62 percent of respondents perceive the outlook of the next quarter as good. Meanwhile, 24 percent perceive the outlook of business as neutral.

Up to 61 percent of respondents expect that the macroeconomic situation in Vietnam will stabilize and improve, while 24 percent say that the situation will not change and 15 percent expect it to deteriorate.

The estimations on inflation rate made by participants in quarter three is higher, moving from 4.26 percent to 4.61 percent. With high expectations on both macroeconomic stability and improvement as well as general expectations on improved business outlook a moderate rise in inflation is a logical expected outcome, said EuroCham.

EuroCham Executive Director, Csaba Bundik, said that the survey showed “a clear trend where the European business community are excited and are gearing up for the future. The signing of and importantly the realization of the FTA will be crucial steps in assuring that these preparations have not been made in vain.”