HCM City (VNA) – European business leaders are increasingly optimistic about the economic prospects of Vietnam whose position as a crucial link in Southeast Asia continues strengthening despite a turbulent global landscape, according to the Q4 2024 Business Confidence Index (BCI) report released by the European Chamber of Commerce in Vietnam (EuroCham Vietnam) on January 8.
The BCI score surged from 46.3 in Q4 2023 to 61.8 in Q4 2024, reflecting a positive sentiment in both current and future outlooks while demonstrating Vietnam’s extraordinary resilience amidst ongoing operational hurdles and global economic uncertainties.
The report said the country’s strong performance is attributed to its continued growth trajectory, improving infrastructure, and emergence as a regional hub for both trade and investment.
For much of the past two years, the BCI hovered around the neutral midpoint of 50, dipping below it on occasions. The Q4 2024 report, however, marks a pivotal shift as the score reached its highest level since early 2022.
According to the survey, 42% of respondents reported feeling positive about the current business situation, with 47% anticipating similarly optimistic conditions for the upcoming quarter. More prominently, 56% of respondents foresee improvements in Vietnam’s macroeconomic outlook in the first quarter of 2025.
Bruo Jaspaert, EuroCham Vietnam Chairman said the clear rise in sentiment reflects a broader recognition of the country’s ongoing political and economic transformation it has seen over the past years. Despite global challenges, Vietnam’s positive investment climate is creating new opportunities for European companies, especially in key sectors like technology, manufacturing, tourism and renewable energy.
He explained that the uptick in business confidence can be attributed to several factors, most notably Vietnam’s ongoing economic reforms and its centrality in the global shift toward sustainability. Particularly, many respondents referenced the “double transformation” of digital and green transitions as key drivers of optimism.
Besides, business that have embraced these trends reported significant growth, with some even citing a 40% increase in revenue compared to the previous year. The trend toward sustainability, spurred by both government policy and global pressures, is becoming a significant factor in shaping business strategies across multiple sectors.
Vietnam – an ideal investment destination
The reported revealed that 75% of survey respondents indicated they would recommend Vietnam as an investment destination. This data underscores the growing recognition of Vietnam’s strategic importance as an investment hub in Southeast Asia. With its strong growth rates and expanding infrastructure, Vietnam has positioned itself as an attractive destination for European businesses looking to expand in the region.
According to Thue Quist Thomasen, CEO of Decision Lab, which conducted the BCI, the data clearly shows that European businesses in Vietnam are increasingly optimistic about the country’s potential as an investment destination, with many firms indicating plans to expand their operations in Vietnam through partnerships with local suppliers of service providers to enhance their footprint in the country.
Additionally, another 30% are looking to increase their trade activities or shift production to Vietnam, he said, adding the move aligns with Vietnam’s successful geopolitical positioning amid global trade shifts, particularly in light of recent disruptions to global supply chains.
However, EuroCham Vietnam experts highlighted operational challenges continue to be a significant concern for European business in the country, with top three obstacles being administrative burdens, unclear regulations, and difficulties in obtaining licenses and permits.
Vietnam is at a critical juncture, noted Chairman Jaspaert, spotlighting the country’s efforts to streamline the political apparatus are expected to bolster the economy.
Another area where businesses are expecting significant improvements is in infrastructure. The ongoing development of the North-South high-speed railway, for instance, has garnered considerable attention, with 58% of respondents predicting substantial benefits for employee mobility and logistics. The railway, expected to significantly improve connectivity between the north and south of Vietnam, will reduce transportation costs, improve supply chain efficiency, and enhance the overall business environment.
Complementing these efforts are advancements in air and maritime infrastructure. Long Thanh International Airport is poised to elevate Vietnam's logistics playing field, while Hai Phong deep seaports are emerging as a key player in the nation’s maritime economy. Collectively, these infrastructure developments in rail, air, and maritime transport will bolster Vietnam’s position as a more competitive player in regional and global trade, while fostering a more efficient and interconnected business landscape.
Vietnam’s remarkable economic rebound, as evidenced by the EuroCham Business Confidence Index, signals a promising outlook for European businesses operating in the country. Despite operational hurdles and global uncertainties, businesses are optimistic about Vietnam’s continued growth, with many preparing for the future by expanding operations and investing in long-term strategies.
“As Vietnam continues its transformation, the opportunities for European businesses are clear. With the right policies, infrastructure, and business environment, Vietnam can continue to attract investment and drive sustainable growth in the coming years”, Jaspaert said./.
