According to EuroCham, the number of businesses positively assessing business prospects in the third quarter of 2023 increased and Vietnam continued to consolidate its position as one of the top 5 investment destinations for European businesses.

Container loading and unloading at Tien Sa port. (Photo: Tran Le Lam/VNA)

Despite many challenges, Vietnam continues to attract foreign investors with 48% of survey respondents expecting foreign direct investment (FDI) from their companies into Vietnam to increase in the next quarter.

This is one of the contents of the Business Confidence Index (BCI) report released by the European Chamber of Commerce in Vietnam (EuroCham Vietnam) on July 10.

According to the report, Vietnam still consolidated its position as one of the top five investment destinations for more than one-third of businesses, demonstrating the country's long-term attractiveness.

According to EuroCham Vietnam, although the business confidence index in the second quarter decreased slightly by 4.5 points to 43.5 points, Vietnam also showed encouraging signs amid the challenges. One of them was the number of business leaders who gave a positive assessment of Vietnam's business prospects in the third quarter, up 9% compared to their assessment in the previous quarter.

European companies’ workforce planning in Vietnam remains stable, reflecting their commitment to maintaining stability in the current context.

In the current business climate, survey respondents highlighted regulatory reform and a skilled workforce as key growth drivers for European companies in Vietnam.

Also according to the survey results of the BCI report, more than half of the surveyed enterprises benefited from the Vietnam-European Union Free Trade Agreement (EVFTA).

Of these, 35% of business leaders said they had benefited from tariff reductions. However, businesses continue to face challenges in making the most of the EVFTA agreements; issues related to administrative procedures and inadequate understanding of the EVFTA remain the main barriers to maximizing benefits from this agreement.

EuroCham Chairman Gabor Fluit said Vietnam's economy, which relies heavily on manufacturing and exports, is being hit hard by the global downturn.

To address these challenges, the Vietnamese Government has been quick to implement a variety of practical solutions, not least by accelerating a number of key infrastructure projects. EuroCham appreciates these efforts and believes that they will provide a significant boost to the economy in the long term.

EuroCham hopes that by acting quickly and comprehensively, Vietnam will not only attract foreign investment but also ensure a strong economy that is able to overcome future obstacles.

Textile and garment production line for export. (Photo: Tran Viet/VNA)

Not only EuroCham, recently, many international organizations have also given positive forecasts about Vietnam's economic situation.

In the Macroeconomic Report published by Standard Chartered Bank on July 7, this unit forecasts that Vietnam's economy will recover in the second half of 2023 and grow at 7.0% year-on-year (from 3.7% in the first half of the year).

Consistently improving monthly trade data since early 2023 points to a clearer recovery in the second half of the year.

Mr. Tim Leelahaphan - economist in charge of Thailand and Vietnam, Standard Chartered shared: "Vietnam's medium-term economic outlook remains promisingly stable and open. The continuous recovery in tourist arrivals will strengthen the service balance."

Sharing the same opinion, Mr. Paulo Medas - Head of the Article 4 working group of the International Monetary Fund (IMF) forecasted that Vietnam's economic growth is expected to recover in the second half of 2023, reaching about 4.7% for the whole year thanks to recovering exports and loosened domestic policies.

Inflation is expected to be contained below the State Bank of Vietnam’s target of 4.5%. In the medium term, Vietnam could return to high growth as structural reforms are implemented.

This figure is lower than 2022, but compared to global growth, Vietnam's economy is still very good.

Meanwhile, Mr. Andrea Coppola, Chief Economist of the World Bank (WB) in Vietnam, commented: "In general, external challenges will create impacts that will only cause Vietnam's economic growth rate to be moderate in 2023. The latest forecasts of the World Bank show that Vietnam's economic growth will reach 6% in 2023, but this prospect still has many potential risks."

According to Mr. Coppola, promoting investment will be the key to Vietnam's economic growth this year and the following years, and at the same time help Vietnam realize its ambition of becoming a high-income economy by 2045 in the context of many challenges related to climate change as present./.

(Vietnam+)