EuroCham: European Business Confidence in Vietnam on the Rise

The confidence of European businesses in Vietnam is showing signs of recovery, reflected in strong growth in the fourth quarter of 2023. Photo: NDO

Strong growth momentum and opportunities for Vietnam in 2024

The European Chamber of Commerce in Vietnam (EuroCham) and Decision Lab on January 6 announced the latest Business Confidence Index (BCI) report. The report is conducted quarterly, providing an overview of European investor sentiment in Vietnam.

According to information from Eurocham, conducted since 2011, BCI surveyed more than 1,400 EuroCham members in many different fields, providing observations over time about the constantly developing dynamics of Vietnam - a vibrant Southeast Asian market.

According to the report, the final quarter of 2023 saw a marked increase in satisfaction levels among European businesses. In particular, the number of businesses confident in their current situation increased from 24% in the third quarter to 32% in the fourth quarter.

The outlook for the first quarter of 2024 is also positive, with 29% of businesses rating their outlook as "excellent" or "good." Another sign that concerns are fading is that the level of extreme worry among businesses dropped from 9% to 5%.

The report also stated that Vietnam's business sector is ready for growth, with 31% of companies planning to expand their workforce in the first quarter of 2024, and 34% intending to increase investment levels, a clear growth from 2023.

According to Eurocham, these statistics signal strong growth momentum and opportunities for Vietnam in 2024.

The BCI for the fourth quarter of 2023 reflects a clear increase in business confidence of European businesses in Vietnam. Photo: EuroCham

EuroCham President Gabor Fluit assessed the current trend. "The confidence of the foreign business community in Vietnam is increasing. Last year, foreign direct investment reached US$36.61 billion, an increase of 32.1% compared to 2022. This is clear evidence of growing confidence in the Vietnamese economy."

He also marveled at Vietnam's strong tourism recovery. By welcoming more than 12.6 million visitors by 2023, Vietnam tripled the number of international tourists compared to the previous year. Global attention on Vietnam as a top destination for business and tourists also signals a broad-based economic recovery.

According to Gabor Fluit, a positive trend is happening, meaning businesses are feeling more optimistic. He also shared that the European business community believes that it has overcome what is considered the most challenging economic period.

Decision Lab CEO Thue Quist Thomasen assessed that Vietnam's long-term economic trajectory shows a promising growth path.

In the short and medium term, Vietnam is demonstrating its ability to provide a stable business environment even at turbulent times, as can be seen by the measured results ranging between 40 and 50 points for the 5th consecutive quarter.

Stability and potential for improvement in 2024 will be the basis for Vietnam to continue receiving foreign direct investment.

Vietnam - rising star in global investment

The report also stated that, in the fourth quarter of 2023, Vietnam's investment hot spot position increased significantly. 62% of those surveyed ranked Vietnam among the top 10 global investment destinations, of which, 17% ranked Vietnam highest.

Eurocham's report also highlighted Vietnam's strategic position in the ASEAN region. Accordingly, a notable figure of 29% ranked Vietnam on the list of "top competitive countries" in ASEAN. The majority (45%) consider Vietnam a strong competitor.

Eurocham assessed that this viewpoint emphasized Vietnam's growing influence and development potential in the ASEAN economic context.

Through the survey, the European business community in Vietnam also pointed out limitations, and challenges, as well as procedural barriers in business operations, gaps in human resources, and international workforce management.

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