27 Jul, 2018

EU businesses remain optimistic about Vietnam´s business environment

According to the recent Business Climate Index (BCI) of the European Chamber of Commerce (EuroCham), European companies continue to remain optimistic about Vietnam’s business environment as well as the EU-Vietnam Free Trade Agreement (EVFTA) which will come into effect in 2019.

Business situation

European firms operating in Vietnam have historically been fairly positive about the business environment in Vietnam. Compared with the previous quarter, respondents who rated the current business environment as “excellent” reduced to 10 percent. However, the percentage who rated the business environment as “good” grew by 7 percent. Negative responses were at almost the same level as Q4 in 2017.

Business outlook and macroeconomic outlook

In general, most respondents are confident in stabilizing and further developing their business in Vietnam. About 69 percent of the respondents rated the business outlook as positive. Whereas, 55 percent of the respondents confident in the macroeconomic situation, 9 percent higher compared to the previous quarter.

Impact of inflation

For European firms, inflation did not seem to be a major issue, with 65 percent of the respondents stating that inflation will only have a “minor impact”, while 19 percent believed that it will have “no impact” on their operations.

Hiring and investment

In terms of labor force, the number of enterprises that want to maintain their workforce remains at 40 percent, while 12 percent planned to significantly increase their workforce and 41 percent will hire reasonably. Besides, EuroCham’s members who plan to maintain their investments accounted for 45 percent of the responses, a nine percent growth compared to the previous quarter. 

Future orientation

EuroCham hopes that in the coming time, Vietnam Government will promote the impetus for further improvements of the business environment, especially the legal changes. Moreover, fulfilling the commitment to the Trade Agreement EU-VN Free Trade Agreement (EVFTA).