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The Saigon Times

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A local customer inspects French apples at a supermarket in HCMC. European business leaders were positive about their own enterprises in Vietnam in the third quarter of the year – PHOTO: LE HOANG

HCMC – The Business Climate Index (BCI) from the European Chamber of Commerce (EuroCham), conducted by YouGov Vietnam, has rebounded in the third quarter of 2020, jumping by 24 points from the previous quarter to 57.5, the highest score since the outbreak of the global coronavirus pandemic.

In the first quarter of the year, when the Covid-19 outbreak first hit international trade and investment, the BCI fell to 26 points but saw a slight increase in the second quarter as Vietnam became one of the global success stories in fighting the pandemic.

With businesses being able to operate with far fewer restrictions and the EU-Vietnam Free Trade Agreement (EVFTA) entering into force on August 1, the confidence of European business leaders has seen a strong resurgence.

Business leaders were positive about their own enterprises in the third quarter of the year, with 40% describing their performance as either “Excellent” or “Good” – more than double the 18% recorded in the previous three-month period.

The fourth quarter of 2020 looks to be even more promising, with 44% predicting a strong performance in late 2020. Most companies are also anticipating stabilization in their headcount (65%) and investment plans (57%), with just under half (44%) expecting to see an increase in their revenue and orders.

With the EVFTA coming into force in the third quarter of the year, the BCI also asked EuroCham members about its impact on their business and investment plans. One-third of respondents stated that the agreement was an important part of their decision to invest in Vietnam, with tariff reductions and greater market access for investors  being the top two factors predicted to drive growth.

“Despite a difficult 2020 for international trade, the data shows that Vietnam’s swift and effective response to the global pandemic has paid dividends,” says Nicolas Audier, Chairman of EuroCham. “European business leaders feel more positive about Vietnam’s trade and investment environment, and report a sense of cautious optimism going into quarter four,” he added.

The BCI is a regular barometer of European companies operating in Vietnam and their perceptions of the trade and investment environment. Each quarter, it tracks the performance of EuroCham’s member companies and their perceptions of the economic outlook in Vietnam.