Thuy Dung
SOURCE: EUROCHAM
The 17th quarterly EuroCham Business Climate Index (BCI) survey, which was conducted last month, showed that confidence and expectations among European businesses in the fourth quarter of last year rose to 78 from 74 in the previous quarter.
EuroCham said 78 was an index digit very close to the results of the survey conducted in the first quarter of 2011.
“The rise continues to be driven by a wide perception of favorable macroeconomic conditions and as with previous quarters the results mirror a high expectancy, held by European businesses, on the ongoing negotiations of the European Union-Vietnam free trade agreement (FTA),” EuroCham said in a review report for the survey.
However, EuroCham noted that the majority of respondents participated in the survey before the break of an undersea optic fiber cable line led to a slowdown in international Internet traffic this month.
In general, the majority of respondents hailed stable macroeconomic conditions in Vietnam and “a lack of threats to business.” The number of respondents describing their business situation as positive kept rising in the final quarter of 2014 compared to previous quarters.
The survey unveiled 52% of the respondents described their business performance as “good” and 5% reported an “excellent” condition. None of the participants reported very poor conditions.
There are many European firms with high hopes for the business outlook in Vietnam as 62% of the respondents expected “good” business conditions, driven by the EU-Vietnam FTA. However, EuroCham noted that its members forecast a sharp decline in confidence if the two sides cannot conclude their ongoing negotiations within a reasonable amount of time.
As for the macroeconomic outlook for Vietnam, 59% of the respondents ticked ‘stabilization and improvement”, a slight drop from 61 in the previous quarter. They predicted an increase in inflation over the next six months, from 4.61% in the third quarter to 5.78% in the fourth quarter of last year.
“A rise in the inflation rate is a logical expected outcome for the participants as they believe the overall business situation in Vietnam to improve and thereby a likely acceleration of the economy,” EuroCham said.
Around 60% of the respondents expected the inflation would slightly affect their business operations while 17% feared a significant impact.
According to the 17th quarterly BCI survey, 48% of the respondents said they are considering slightly adding staff and the largest group of 41% reported plans to slightly increase investments in this market in the medium term.
As for revenue, 56% expected a certain increase.
More European firms optimistic about Vietnam outlook Related image(s)
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