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Tuesday, July 16, 2024

German companies optimistic about business in Vietnam despite Covid-19

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HCMC – German companies are understandably concerned about the impact of Covid-19 on their businesses in Vietnam but are still optimistic and have higher expectations compared with all averaged indicators among German companies in the Association of Southeast Asian Nations (ASEAN), whose members include Vietnam.

According to the World Business Outlook 2020 conducted online by the Delegate of German Industry and Commerce, with the participation of more than 3,500 German companies and their partners worldwide, many German companies in Vietnam have been hurt by the virus.

Cancellation of trade fairs and large-scale events and the decline in travel have affected the service sector, especially in the areas of logistics, trade, gastronomy and tourism.

German companies’ revenue expectations have dropped significantly. Over 80% reported lowering revenue targets due to the coronavirus, while 9% have serious problems and expected a significant decline of more than 50%. Some 60% of them calculated losses of 10%-50%.

Some 14% of German companies expected their business performance to be weaker in 2020, while 59% expected their company’s operations and financial position to be stable this year. Only 27% rated their current business situation in Vietnam as good (compared with 77% in 2019).

“However, compared with other German firms in the ASEAN, the German community in Vietnam has an optimistic perspective and expectations for the upcoming year. Two-thirds of respondents believed that their business situation would become stable or improve in 2021,” the survey found.

Over 70% of German companies in Vietnam intend to keep investing in Vietnam and 27% assume an increase in employment.

“The fact that the Vietnamese Government is committed to creating the most favorable conditions for foreign investors and businesses as well as the upcoming free trade agreement between the European Union and Vietnam, which will probably come into effect this summer, will boost the economic growth of this country and attract more investors to Vietnam,” the survey said.

“Implementing aid packages is essential for Vietnam to mitigate the impact of the coronavirus. It shows that the Vietnamese Government has taken decisive and forceful action against the impact of the coronavirus crisis. These measures should be taken as quickly as possible to counter the economic impact of the coronavirus to bring the economy back onto a growth path as soon as possible,” it added.

By Minh Tuan

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