EuroCham: Vietnam’s reopening promises growth

The European Chamber of Commerce in Vietnam (EuroCham) has released its Business Climate Index (BCI) for the third quarter of 2021, in which Vietnam’s potential to grow is deemed as positive when the economy reopens.

As lockdowns end and the country gradually enters the “new normal”, members of EuroCham are more optimistic about its business environment.

This resulted in a small but encouraging increase in the BCI, which is a regular barometer of the perceptions of EuroCham members. The index rose 3 points, from a record low of 15 points in September, to 18.3 points in the third quarter.

Perceptions about Vietnam’s economic outlook were improved, with 49 per cent of business leaders and investors predicting that the economy will be stabilized and improved over the next quarter, compared to 19 per cent in the second quarter.

“With the pandemic now back under control in Vietnam, the confidence and optimism of European business leaders should continue to climb as companies get back to normal and consumer confidence rises,” said Mr. Alain Cany, Chairman of EuroCham.

However, business leaders remain cautious about their own recruitment, investment, and profit projections. Around one-fifth of companies are planning to hire more workers in the next three months - a figure consistent with the last quarter. Similarly, the 69 per cent of business leaders planning to maintain or increase their investment in the fourth quarter is only two points higher than in the third quarter.

EuroCham also pointed out that many companies are operating under capacity due to travel restrictions and a shortage of human resources. There are still problems to be solved for Vietnam to reach its full potential in post-pandemic trade and investment.

“With two-thirds of companies suffering from the impact of travel restrictions and staff shortages, this highlights the urgent need to speed up the entry of vaccinated experts and accelerate the vaccination of domestic workers,” Mr. Cany added.