European Businesses More Optimistic About Viet Nam’s Investment Climate

10:51:01 AM | 4/20/2022

European business confidence in Viet Nam’s investment environment continued to rise at the start of 2022, according to the Business Climate Index (BCI) from the European Chamber of Commerce in Viet Nam (EuroCham).

For the first quarter of 2022, the BCI climbed to 73 index points, once again reaching its highest point after the fourth wave of the pandemic.

This is a 12-point increase compared to the fourth quarter of 2021, in addition to nearly 58 points of growth compared to the third quarter, with business executives now more upbeat after the relaxation of Viet Nam's pandemic-related restrictions and the continued acceleration of its economic development.

The BCI is a regular barometer of European business leaders and investors. 

EuroCham requests its membership of more than 1,200, with representation made up of business leaders and investors throughout all sectors of Viet Nam's economy, to provide quarterly updates of their perceptions of Viet Nam's trade and investment environment as well as to make projections for their own respective companies. 

This research was first conducted in 2013 and has been carried out by YouGov since 2020.

European business leaders are generally showing increasingly improving attitudes towards the prospective growth of Viet Nam's economy as well. 

More than two-thirds of respondents now believe that the Vietnamese economy is more likely to stabilize and improve in the second quarter of 2022, compared to 58 percent who held this view in the fourth quarter of 2021. 

This far exceeds the five percent of respondents who anticipate economic deterioration for next quarter.

European business stakeholders also indicated ambitious second quarter projections for their companies, especially when compared to projections made for the first quarter. 

Nearly 66 percent of respondents are expecting increased revenue for the second quarter of the year, compared to 52 percent three months earlier. 

Likewise, more than 46 percent of respondents are forecasting headcount increases for next quarter.

For the first time, the BCI also tracked attitudes towards Viet Nam's prospective green growth. 

More than 82 percent of respondents indicated a positive outlook regarding the potential for the country's green, sustainable development, reflecting widespread eagerness towards Viet Nam's green future.

Chance to attract new wave of high-quality, green FDI

EuroCham Chairman Alain Cany said, Viet Nam's economic recovery is rapidly moving forward, with the country remaining one of the best performing and most exciting investment destinations in the world. 

FDI disbursed in Q1 of 2022 reached its highest level over the past five years. Likewise, Viet Nam's Q1 2022 GDP growth rising over 5 percent is extremely encouraging, he noted.

With these recent developments and with Viet Nam's reemergence as an international economic power center, the economy has the chance to attract a new wave of high-quality, green FDI from European investors looking for a safe and competitive investment destination, underscored Alain Cany.