European businesses upbeat about Viet Nam's economic prospects in Q3

Kim Loan Tuesday | 07/11/2023 12:00

Viet Nam remains firmly positioned among the top five investment destinations for over one-third of businesses. Photo by VGP.

BCI of the European business community in Viet Nam shows a 9 percent increase in the number of business leaders who assess their business prospects positively for the third quarter this year.

The index for the second quarter of 2023 reveals a marginal 2 percent increase in the proportion of businesses anticipating economic stabilization or improvement, bringing the total to nearly one-in-three respondents.

The BCI reveals a challenging outlook, with a significant 10 percent increase in negative responses regarding the current business situation. This growing sense of caution is further reflected in a 6 percent rise in negative sentiment for the upcoming quarter.

In the current cautiouhttps://eurochamvn.org/wp-content/uploads/2023/02/Business-Confidence-Index-BCI-Q2-2023.pdfs business climate, respondents highlight regulatory reforms and the availability of skilled labor as crucial drivers for their companies' growth. Regulatory reforms are deemed the primary factor contributing to the growth in the service sector, while the manufacturing sector places significant emphasis on the availability of skilled labor.

However, the survey pointed out challenges including visas and work permits for foreign workers, the impact of power shortages on operations, the perception of inadequate infrastructure development, unclear regulations, and onerous administrative procedure barriers to FDI as well as the Global Minimum Tax and Personal Data Protection.

Despite the challenges, Viet Nam continues to attract foreign investors, with 48 percent of respondents expecting an increase in their company's foreign direct investment (FDI) in the country next quarter.

Viet Nam remains firmly positioned among the top five investment destinations for over one-third of businesses, underscoring its enduring appeal.

"Viet Nam's economy relies heavily on manufacturing and exports, and it has taken a big hit from the tough global situation. This decline in exports and orders has had a major impact on European businesses and the overall business community. The Business Confidence Index (BCI) clearly shows this current gloomy outlook, said EuroCham Chairman Gabor Fluit.

The Chairman said that the Vietnamese government has swiftly taken practical steps, particularly by expediting key infrastructure projects. “We commend these efforts, which will surely bring a substantial long-term boost to the economy,” he added.

The BCI collected feedback from EuroCham Viet Nam's extensive network of 1,300 members across a diverse range of sectors.

Source: VGP