Business confidence, outlook and expectations for the future among European businesses in Vietnam in the first quarter of 2015 declined slightly from the end of last year, according to the European Chamber of Commerce in Vietnam (EuroCham).

During the first quarter of 2015, the EuroCham Business Climate Index (BCI) decreased to 75 from 78 at the end of 2014.

The overall score still expresses a relatively positive perception of the current and future business environment in the market.

Participants perceiving the situation as “good” shifted from 52 percent in the previous quarter to 45 percent. Those with a “neutral” view remained largely unchanged at 31 percent while “very poor” conditions were reported by 2 percent. In contrast, the number of respondents that reported excellent conditions rose to 11 percent.

Macroeconomic-speaking, 63 percent of respondents reported “stabilisation and improvement”, a rise from last quarter’s 59 percent. Participants expecting the situation “not to change” also shifted from 20 percent to 25 percent.

The noticeable decline was in the number of those that expected “deterioration of the macroeconomic conditions” from 21 percent to 12 percent.

In terms of the new regulations in Vietnam’s enterprise law and investment law, 41 percent of the participants said they were unaware of the details of the new regulations and 21 percent were uninformed and unaware that there were new regulations.

Respondents expected that over the next six months, the market would see a slight reduction in inflation from 5.78 percent to 5.25 percent.

While 65 percent reported that they believed inflation would have a slight impact on their business, another 17 percent feared significant impact.

For investment plans in the medium term, the largest group remains unchanged at 41 percent saying they would consider increasing their investment in Vietnam “slightly”. This is followed by the second largest group at 35 percent expecting to “maintain” their level of investment.-VNA