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Many European firms in Vietnam want to increase investment, headcount

By Le Hoang

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HCMC – European companies ended 2021 more positive and optimistic about Vietnam’s trade and investment environment. Many of them are planning to increase their investment and headcount in the first quarter of 2022, according to the Business Climate Index (BCI) released by the European Chamber of Commerce in Vietnam (EuroCham) on January 26.

The BCI reached the highest point following the fourth wave of Covid-19 infections, with positive sentiment reaching 61 points, a jump of 42 points since the third quarter of last year after the end of lockdowns and the reopening of normal commercial operations.

The BCI remains below its pre-pandemic peak. However, it is a clear sign that confidence is returning to the market.

According to the survey, up to 58% of European business leaders are now anticipating economic stabilization and growth in the first quarter of 2022, while 17% predict a deterioration, a figure which has almost halved since the last BCI.

Business leaders are also more confident about the prospects of their own enterprises in this post-pandemic “new normal”.

Therefore, 43% are planning to increase their investment in the first quarter of 2022, compared to just 17% three months ago.

Likewise, 38.5% intend to increase their headcount, up around 15%, while 51.5% predict a rise in orders and revenue, an increase of 7.5% compared to the third quarter of last year.

Commenting on the BCI, EuroCham chairman Alain Cany said, “These latest figures are a vote of confidence in Vietnam’s trade and investment environment now that the pandemic is back under control as well as in the government’s clear direction of learning to live with the virus.”

According to the EuroCham chairman, business leaders welcome the return to life and business, as usual, particularly the easing of entrance requirements for vaccinated foreigners who live and work here. This new regulation will help improve the business environment and further increase the confidence of business leaders.

However, some sectors remain at risk of falling behind in the race to recover post-pandemic, he added.

Tourism, one of Vietnam’s spearhead economic sectors responsible for millions of jobs, remains restricted to guided tours, hindering economic growth.

Therefore, EuroCham encouraged the Government to go further and faster in re-opening – at least areas with high vaccination rates – so that Vietnam can achieve its full potential as a leader in this industry and others and attract more foreign investment in 2022.

The BCI is a regular barometer of European business leaders and investors. Each quarter, EuroCham asks its over 1,200 members, including business leaders and investors in all sectors and industries, for their perceptions on Vietnam’s trade and investment environment and their predictions for the prospects of their own companies. Since 2020, the fieldwork for the BCI has been conducted by YouGov Vietnam.

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