HCM City (VNA) – The European Chamber of Commerce Vietnam (EuroCham)announced on October 9 its Business Confidence Index (BCI) for the third quarterof 2023, showing that the BCI has regained its upward trajectory in the period,which offers a glimmer of hope for the Vietnamese business environment after aturbulent year.

The BCI nudged up to 45.1 in Q3, from 43.5 the previousquarter. While still below the 50-point threshold for four straight quarters,this small rise indicates emerging positive economic momentum.

Between Q2 and Q3, there was a 3 percentage point drop inpessimism regarding the current situation, while positive and neutralperspectives increased by 6 and 4 percentage points respectively.

Furthermore, the Q3 survey revealed a shift in projectionsfor the quarter to come. Compared to responses in the Q2 survey, there was an11 percentage point rise in businesses anticipating economic stabilisation andgrowth for the upcoming quarter. On the other hand, businesses projecting anegative trend reduced by 5 percentage points, said EuroCham.

Vietnam's global investment appeal remains strong, with 63%of surveyed businesses positioning Vietnam within their top 10 FDIdestinations. Even more striking, 31% ranked Vietnam among their top three,while an impressive 16% hailed it as their foremost investment destination.Reflecting this confidence, over half of those surveyed plan to increase their FDIin Vietnam by the end of the year.

However, a substantial 59% cited administrative difficultiesas their main challenge when operating in Vietnam.

To improve the nation's FDI attraction, 58% of respondentssaid streamlining bureaucracy is key, 48% advocated for enhancing theregulatory environment, one-third called for upgrading transport infrastructure,and 22% emphasised easing visa and work permit requirements for foreignexperts.

Sustainability is rising as a priority for Europeancompanies in Vietnam, with 80% citing ESG (Environmental – Social – Governance)alignment as highly or moderately important.

Regarding the EU-Vietnam Free Trade Agreement (EVFTA), over60% of companies called the deal beneficial after more than two years of itsimplementation, citing tariff cuts as the top perk, followed by improvedcompetitiveness in Vietnam, reduced trade barriers, expanded partnerships withlocal firms, and increased access to the Vietnamese market.

"It's clear: Team Europe stands firmly behindVietnam," said EuroCham Chairman Gabor Fluit, commenting on the BCI."Nearly one-third of our members ranking Vietnam as a top-three investmentlocation sends a powerful message about our faith in this partnership."

However, he noted challenges remain. "While we sawpromising Q3 GDP and FDI growth, issues persist - especially with exports andreal estate. To progress, addressing administrative burdens, unclearregulations, and permitting hurdles is crucial. We remain committed to opendialogue to effectively tackle these issues together."

The quarterly BCI, which is conducted by Decision Lab,serves as a vital tool for understanding the perceptions of European andEurope-related companies and investors in the Vietnamese market. Conductedsince 2011, the BCI collects feedback from EuroCham Vietnam's extensive networkof 1,300 members across a diverse range of sectors. This survey providesvaluable insights into the current business landscape in Vietnam and offers aglimpse into future expectations.

Decision-makers, media, and business professionals see theBCI as a key indicator of economic activity in the country. It is a trustedsource of information on the business environment in Vietnam, and its findingsare widely used to inform government policies and investment decisions./.