Small and medium sized businesses in Vietnam are the most confident in the Asia region regarding national economic growth, said a report released last week by HSBC Bank (Vietnam).
The report said for the first time since the financial crisis, all Asian markets hold a positive outlook in terms of local economic growth and recruitment and that Vietnam was the most confident country with an index of 164 in the first half of 2010 compared to 150 at the same time last year.
The average index was 121 in Asia, an increase from 107 a year earlier, said the report.
"Although there is a smaller increase in the confidence index when compared with the previous survey, Vietnam still remains at the top of the 21 markets surveyed," said HSBC Bank Vietnam's head of Commercial Banking, Huynh Buu Quang, in a statement.
"This shows Vietnamese small businesses, like other SMEs in emerging markets, still have a rosy view of the local economy, despite recent global economic uncertainty."
Singapore, mainland China and India followed behind Vietnam with indexes of 136, 123 and 121, respectively, said the bank which surveyed 6,300 SMEs across 21 markets in Asia, the Middle East, North America and Latin America to gauge the six-month outlook of the sector on economic growth, capital investment plans and recruitment.
The results were used to calculate an index ranging from 0 to 200, where 200 represents the highest confidence level, 0 the lowest and 100, neutral.
Over two thirds of the respondents in Vietnam believed the national economy would improve while just 7 percent expected growth to slow in the next six months, said the report, adding the rest believed growth would stay the same.
The report said 48 percent of the respondents placed great faith in government policy as they thought government measures were key drivers for local economic growth.
Rising demand from the domestic market was ranked second behind government policy, said the report.
It said Vietnamese SMEs are holding on to their optimistic views with 58 percent planning to hire more staff and 70 percent saying they will increase their capital expenditure in the next six months.
From the results of the survey, carried out in May and June, 2010, the report found that the biggest barrier facing Vietnamese SMEs when doing business internationally was now "concern about dealing in foreign currencies" where it used to be "unstable financial conditions."