European Businesses Optimistic about VN’s Business Environment

European firms continue to be optimistic about the business environment in Viet Nam and expect that the EU-Viet Nam Free Trade Agreement will soon come into effect.

The information was released in the European Chamber of Commerce in Viet Nam (EuroCham Viet Nam)’s latest Business Climate Index (BCI) in the second quarter of 2018.

The BCI score in the first quarter reached 78 points, one point higher than the previous one.

However, the percentage of respondents rating the business situation as excellent dropped by nearly 10 per cent, with an increase of 7 per cent in respondents describing the situation as good. Negative responses were at almost the same level as in the fourth quarter of 2017.

More respondents showed their confidence of a stable and continuously improving macroeconomic scenario in Viet Nam with a 9 per cent increase, while those expecting no change in the next quarter increased by nearly 10 per cent.

Only 1 per cent supposed that inflation will threaten their operation.

The number of businesses expecting to maintain the current size of their workforce remained at 40 per cent, while 12 per cent will significantly increase their workforce. Responses indicating intention to reduce headcount a little bit accounted for 5 per cent compared to 10 per cent in the previous quarter.

Meanwhile, 45 per cent of the respondents said they intend to maintain their level of investment, a 9 per cent rise.

EuroCham Co-Chairman Nicolas Audier said that the BCI survey results for the first quarter of 2018 manifested optimistic prospects from European businesses for Viet Nam, however, lower than in 2016.

EuroCham expected that in the upcoming time, the Vietnamese Government will accelerate forces in improving the business environment, especially legal changes which allows Viet Nam to complete its commitments in the EVFTA.

Vietnam Business Forum