European business confidence highest since fourth Covid wave in Vietnam

Laborers work at an assembly line to produce ventilators at Vsmart factory of conglomerate Vingroup outside Hanoi, August 3, 2020. Photo by Reuters/Kham.

The Business Climate Index (BCI) of European companies in Vietnam in Q1 reached its highest level, at 73 points, since the fourth coronavirus wave hit the country last April.

According to VN Express, the index increased by 12 points from the previous quarter and 58 points over the historic low of 15 in September last year as Vietnam imposed prolonged social distancing measures during the fourth coronavirus wave, according to a new report released this week by the European Chamber of Commerce (EuroCham).

The report, which surveyed 1,200 European business leaders in Vietnam, found they were more upbeat after the relaxation of Vietnam’s pandemic-related restrictions and continued acceleration of its economic development.

The BCI is likely to sustain this upward trend next quarter, with a more optimistic business outlook from business leaders, it said.

In terms of economic prospects, more than two-thirds of respondents believe the Vietnamese economy would stabilize and improve in the second quarter of 2022, higher than the 58 percent who held this view in the fourth quarter of 2021.

Nearly 66 percent of respondents expect revenue growth in the second quarter of the year, compared to 52 percent in the previous quarter.

More than 46 percent of respondents are forecasting headcount increases in the next quarter.

EuroCham Chairman Alain Cany said that European business leaders have wholeheartedly endorsed Vietnam’s post-pandemic "new normal" investment environment.

"There has been cause for optimism following the relaxation of Vietnam’s pandemic restrictions and the results of this survey reflect this."

Last January, Eurocham urged the Vietnamese government to reopen travel activities faster Land increased public direct investment as the country recovered from Covid-19 impacts.

The country lifted all restrictions on international flights from February 15 and reopened inbound tourism with relaxed entry rules from March 15.

Vietnam's GDP rose 5.03 percent in the first quarter.

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