Source from eurochamvn.org
EuroCham releases Business Climate Index for Q1 2018.
by Linh San
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EuroCham has released the results of its Business Climate Index (BCI) for Quarter 1, 2018, with an index score of 78; one point up from the previous quarterly survey.
Almost 90 per cent of members are either maintaining or increasing their investment in Vietnam.
“The results continue to show positive expectations from EuroCham members towards Vietnam, albeit not at the same levels of optimism that we saw in 2016,” said Mr. Nicolas Audier, Co-Chairman of EuroCham. “EuroCham hopes that this interest inspires the Vietnamese Government to improve the business environment further, particularly regarding the changes to the legal framework that will enable Vietnam to fulfil its commitments under the EU-Vietnam Free Trade Agreement (EVFTA), expected to come into force later this year.”
The BCI score reflects optimism regarding fast and efficient reforms in the short term, boosted by expectations towards the timely ratification of the EVFTA. “Even though this BCI score is positive, there is still quite some legal and regulatory work to do in Vietnam,” he added. “EuroCham remains confident that current hurdles to liberalization will be surpassed and that our next survey will again reflect an excellent outlook from the perspective of the European and Europe-related business community in Vietnam.”
The sentiment of European and Europe-linked companies in Vietnam when it comes to the conditions for business in Vietnam is moderately positive. Compared to the last quarter, respondents stating that the business situation was “Excellent” fell almost 10 per cent, with a 7 per cent increase in responses describing the current context as “Good”. Negative responses remain marginal, close to the levels in the previous quarter.
Forty-five per cent of EuroCham members intend to maintain their level of investment; a 9 per cent increase against the fourth quarter of 2017. Those with intentions to increase their investment also remains substantial, despite those thinking about significantly increasing their investments being down 7 per cent. Eleven per cent more, meanwhile, intend to moderately increase their investment. Those planning divestments is close to the previous quarter’s result.
The BCI can sometimes include special questions that EuroCham finds pertinent. This quarter it included two such questions: one on the regulatory environment and another on the impact of corruption.
In regard to the first, EuroCham asked its members how they saw the development of the regulatory landscape in Vietnam over the course of last year. Those who agreed that there was no change when compared to previous years led, with 37 per cent, while 25 per cent said it had “slightly improved” and a small number, 2 per cent, said it had “significantly improved”. Sixteen per cent said the regulatory landscape has become “slightly complicated” while 18 per cent believe regulations introduced last year made it “significantly more complicated” for businesses to operate.