The BCI, which quantifies the business sentiment of the European business and investment community in Viet Nam, held steady at 48.0 in the first quarter of 2023. 

Though it remains at the same level it registered as 2022 drew to a close, there are promising indications that European business stakeholders are witnessing a positive shift in their economic outlook.

Encouragingly, the business environment outlook for 2023 is displaying promising signs of betterment. Specifically, the number of respondents who are sanguine about the nation's economy has risen by 8 points, signaling a growing faith in its prospects. 

Likewise, a notable uptick in the number of individuals anticipating the stability and growth of the economy was observed. According to the survey, the number of individuals expecting a downturn in the economy decreased by 6 percent, while the number of those forecasting an upturn in revenue and orders increased by 7 percent.

Policy measures driving sustained business growth and success

Through a range of strategic initiatives aimed at enhancing the business environment, Viet Nam has emerged as a leading destination for foreign investment and domestic enterprises alike. 

Based on feedback from survey participants, regulatory simplification, sustainable development measures, investment incentives, and workforce development programs have all played a key role in creating prime conditions for long-term economic success.

The survey results also indicate that the European business and investment community is broadly content with the level of attention policymakers have given to business needs in Viet Nam, with a third of respondents expressing significant or moderate satisfaction. 

This positive feedback is a testament to the government's ongoing commitment to fostering a business-friendly environment in the country.

Viet Nam's appeal as FDI destination

Viet Nam's draw as a foreign direct investment (FDI) destination remains strong among European business leaders, with 3 percent more European business stakeholders citing it as one of their top three investment hotspots worldwide. 

Overall, precisely 36 percent of those surveyed ranked Viet Nam either first, within their top three, or among their top five investment destinations on a global scale.

According to respondents' expectations for the second quarter of 2023, tourism has emerged as one of the top three sectors poised for growth, with 38 percent citing it as a potential high-growth industry. 

This is likely due to an upsurge in travel and imminent travel visa reforms. Additionally, 21 percent identified food and beverage and renewable energy as sectors they expect to gain ground in the same period.

Government takes swift, decisive action

EuroCham Chairman Gabor Fluit said that the Vietnamese government takes swift and decisive action during times of crisis. Therefore, the EuroCham expects more productive measures in the second half of the year. 

Upcoming reforms to work permit and travel visa procedures will likely have a direct impact on growth, he noted. 

There has also been a notable improvement in liquidity in recent months, he said, expressing his belief that a clear indication from the government on improved access to finance would boost morale.

The Business Climate Index is widely regarded as the premier metric for gaining insight into the European business and investment community's perceptions of the Vietnamese market. 

Assembled from feedback gathered from EuroCham Viet Nam's expansive network of 1,300 members, who collectively represent nearly every sector of the country's dynamic economy, this quarterly survey delivers indispensable insights into the current state of Vietnam's business environment and provides a snapshot of what to expect in the future.