Vietnam's economic potential is undeniable.

This morning (July 15th), the European Chamber of Commerce in Vietnam (EuroCham) released its Business Confidence Index (BCI) report for the second quarter of 2024, providing a multifaceted perspective on the economic landscape for European businesses in Vietnam.

(Source: Industry and Trade Newspaper)

Despite strong GDP growth in the first half of the year, the BCI experienced a slight decline from 52.8 in Q1 2024 to 51.3 in Q2 2024, highlighting the need for continued policy adjustments to sustain growth momentum.

The BCI survey, conducted by Decision Lab and distributed to EuroCham's network of 1,400 members, serves as a gauge of the sentiment of European businesses operating in Vietnam. This quarterly assessment provides real-time insights into the evolving business environment of one of Southeast Asia's most dynamic markets.

European businesses remain confident in Vietnam's long-term growth.

Mr. Dominik Meichle, President of EuroCham Vietnam, stated that Vietnam's economic potential is undeniable and the European business community remains confident in the country's long-term growth.

"Although our survey points out areas for improvement, we believe that by collaborating to address administrative and regulatory barriers, we can create a more efficient and attractive business environment, benefiting both the European and Vietnamese business communities," emphasized the President of EuroCham Vietnam.

Meanwhile, Thue Quist Thomasen, CEO of Decision Lab, commented that the survey results reveal a nuanced picture of the business landscape.

While 68% of respondents indicated that current conditions are moderate to positive, short-term caution has slightly increased, and this needs to be addressed for the positive trend to continue.

However, the strong Gross Domestic Product (GDP) growth rate of 6.42% in the first half of 2024 and nearly 70% expressing long-term optimism suggest a strong belief that positive indicators can materialize in the future.

According to the survey, although the general assessment of Vietnam's economic outlook in Q3/2024 is cautiously optimistic (45%), private businesses remain hesitant about their own prospects. Specifically, 45% gave a neutral opinion and 23% expressed concern.

This short-term uncertainty is balanced by strong long-term confidence, with nearly 70% of businesses expressing optimism about Vietnam's economic growth over the next five years. This confidence is reflected in the percentage of businesses that would recommend Vietnam as an investment destination.

While European businesses remain optimistic about Vietnam's potential, the survey highlights persistent legal challenges hindering growth and investment.

The main issues identified include: Ambiguous regulations that are interpreted in different ways; cumbersome administrative procedures; difficulties in obtaining permits and approvals; challenges regarding visas and permits for foreign workers; and duplicate or inconsistent approvals between different levels of government.

To attract more FDI from Europe

To attract more foreign direct investment (FDI) and stimulate economic growth, surveyed businesses highlighted five factors that Vietnam can improve its business environment:

First, streamline administrative processes and procedures.

Secondly, enhance clarity in the law to reduce misinterpretations.

Third, develop core infrastructure (roads, ports, bridges, etc.).

Fourth, simplify the procedures for granting visas and work permits to foreign experts;

Fifth, ensure political stability and security.

To further address these challenges and promote sustainable economic activities, EuroCham Vietnam will organize the Green Economy Forum and Exhibition (GEFE) 2024, taking place from October 21-23 in Ho Chi Minh City.

The three-day event will include workshops, a green technology exhibition, and a high-level plenary session with European and Vietnamese leaders. The event aims to equip businesses with the knowledge, connections, and tools necessary to navigate Vietnam's evolving business landscape while promoting environmentally responsible practices.

Source: https://baoquocte.vn/chu-tich-eurocham-tiem-nang-kinh-te-cua-viet-nam-la-khong-the-phu-nhan-278728.html