European business community is optimistic about the outlook of Viet Nam's economy. (Photo: VOV)

The latest report of the Business Climate Index (BCI) from the European Chamber of Commerce in Viet Nam (EuroCham), released on April 15, indicates the increasing confidence of European companies in Viet Nam’s investment environment in the first quarter of the year.

The report highlights that the BCI rose 73 percentage points in the first quarter of the year, reaching the highest level since the fourth pandemic outbreak. This number soared by 12 percentage points from the fourth quarter of 2021, in addition to representing an increase of almost 58 points from the third quarter.

According to the EuroCham report, European business community is now increasingly optimistic due to the country relaxing anti-pandemic rules, with its economy continuing to recover and develop. As a result, BCI is likely to continue this upward trend into the next quarter, with a more positive business outlook ahead.

In line with the feedback, over two-thirds of respondents believe that the Vietnamese economy is likely to stabilize and improve in the second quarter of the year, while only 58% had positive forecasts in the fourth quarter of 2021. This is well above the 5% of respondents who predicted a recession ahead in the next quarter.

European businesses are also providing ambitious Q2 forecasts for their companies, especially in comparison to Q1 forecasts. Indeed, 66% of respondents anticipate that sales will increase in the second quarter of the year, compared to 52% in the previous quarter. Likewise, more than 46% of respondents predict that the number of employees will increase in the coming quarter.

For the first time, the BCI has conducted a survey of enterprises’ assessment of the country’s future green growth. More than 82% of respondents believe that the outlook is positive with regard to the potential for sustainable development, reflecting confidence in the country’s green future.

With regard to the BCI results, Alain Cany, President of EuroCham, said that economic recovery of Viet Nam is moving fast. According to him, the nation has the opportunity to attract a new wave of green, high-quality FDI from European financiers seeking a safe and competitive investment destination.

“Given that BCI participants have expressed deep enthusiasm for Vietnam as a destination for green growth investment, there is no better time than now to get up to speed in Vietnam’s sustainable development sector,” Cany said.

“To this end, green development will be the main theme of EuroCham’s activities in 2022, culminating in the Green Economy Forum and Exhibition (GEFE) 2022. GEFE 2022 will be a platform for exchange and participation between relevant individuals and organizations, the business community and government agencies from both Europe and Vietnam”, he said.

BCI is a periodic report that consults with over 1,200 European EuroCham member investors and business leaders from a variety of sectors of the economy, while also providing quarterly updates of environmental assessment, Vietnamese trade and investment, as well as making predictions about the business prospects of companies. This survey has been conducted since 2013, with it being conducted by YouGov Viet Nam since 2020.