The European Chamber of Commerce (EuroCham) in Vietnam on January 22 announced the Business Climate Index (BCI) for the fourth quarter of 2014, showing business confidence, prospects and expectations improved significantly.

In the fourth quarter the BCI increased from 74 to 78, and according to Csaba Bundik, Executive Director of the EuroCham, the results of the survey reflect European enterprises’ expectations on the effects of the Free Trade Agreement between the European Union and Vietnam in the future.

The confidence, however, would dramatically shrink if on-going rounds of negotiations could not come to an end within a reasonable amount of time, he said.

The number of respondents that assert their business situation as positive continued to rise, with 52 percent perceiving the situation as “good”, while 33 percent reported a “neutral” business situation and around 8-10 percent reported poor condition.

The greater majority of respondents perceive their business outlook as “positive”, and 62 percent of the respondents expect “good” business conditions.

The participants expect a rise in the inflation rate over the next six months, from 4.61 percent in the last survey up to 5.78 percent in Quarter 4. A rise in the inflation rate is a logical expected outcome for the participants as they believe the overall business situation in Vietnam to improve and thereby a likely acceleration of the economy.

This is also reflected in participants’ expectations on headcount, investment and orders/revenue. For headcount development, 48 percent of respondents said they are considering increasing slightly the number of employees. Likewise, answering questions in regards to investment plans in the medium term, the largest group at 41 percent said they consider increasing their investment in Vietnam slightly.

The survey, however, showed a slight rise in concerns over o verall positive macroeconomic outlook for Vietnam, wih 59 percent of partici pants assessing the macroeconomic outlook for Vietnam as ‘stabilization and improvement”, a slight drop from last quarter’s 61 percent. Participants expecting the situation “not to change” also shifted slightly from 24 percent to 20 percent and there was a rise in the number of participants that expected “deterioration of the macroeconomic conditions”, from 15 percent to 21 percent.

Csaba Bundik said EuroCham will actively coordinate with the Vietnamese Government to address the problems European enterprises have been facing to ensure a better and more transparent business climate as well as help them get ready for investment and business opportunities from the FTA.-VNA