European enterprises optimistic about business recovery in Vietnam

Thursday, 2020-11-26 16:36:34
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The Piaggio Vietnam Factory in Vinh Phuc province. (Illustrative image)
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NDO – The European Chamber of Commerce in Vietnam(EuroCham) has released the EuroCham Business Climate Index (BCI) for the third quarter of 2020, showing a more optimistic sentiment among European business leaders as the index jumped to 57.5 percentage points in the third quarter from the previous level of 33.6 percentage pointsin the second quarter of this year.

This is also the highest BCI score of EuroCham Vietnam since the outbreak of the COVID-19 pandemic across the world.

According to the EuroCham report on November 26, European enterprises believe that the economy is more likely to stabilise and improve, indicating a stronger sense of hope for the fourth quarter of this year.

Up to 40% of surveyed enterprises described their performance as “Excellent” or “Good”, doubling the rate recorded in the previous quarter of 18%.

Over 44% of business leaders forecast that the volume of and revenue from orders in the next quarter will increase moderately or significantly thanks to Vietnam’s swift response to the second wave of COVID-19 in the third quarter of this year.

Regarding the coming into force of the EU-Vietnam FTA(EVFTA) in the third quarter of 2020, 30% of enterprises said the deal has an important impact on their FDI decision-making.

In addition, 33% of enterprises said that tariff reductions have had the biggest impact on increasing trade within their sector while 50% said that international travel restrictions will continue to have a moderate to significant impact on their business.

Chairman of EuroCham Vietnam Nicolas Audier said that despite a difficult year for international trade, the survey demonstrated that Vietnam's rapid and effective measures against COVID-19 have paid off. European business leaders have a more positive outlook on their businesses as well as Vietnam's trade and investment environmentand tend to be cautiously optimistic about the fourth quarter, he noted.

The effectiveness of the EVFTA has certainly contributed to this sentiment, with tariff reductions and market accessibility increasingly important to EuroChammembers, certain to boost new FDI from the EU in the future, he said.