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[VIETNAM, 15 July 2024] – The European Chamber of Commerce in Vietnam (EuroCham) unveiled its Q2 2024 Business Confidence Index (BCI) report, offering a nuanced perspective on the economic landscape for European enterprises in Vietnam. Despite the country’s robust first-half GDP growth, the BCI experienced a marginal decline from 52.8 in Q1 to 51.3 in Q2 2024, underscoring the necessity for ongoing policy adjustments to maintain momentum.
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The BCI survey, conducted by Decision Lab and distributed to EuroCham’s network of 1,400 members, serves as a barometer of sentiment among European businesses operating in Vietnam. This quarterly assessment provides real-time insights into the evolving business environment of one of Southeast Asia’s most dynamic markets.
Click here to access the full Q2 2024 BCI report in English and click here for Vietnamese.
“Vietnam’s economic potential is undeniable, and the European business community remains confident in its long-term growth,” says Dominik Meichle, Chairman of EuroCham Vietnam. “While our survey points to areas for improvement, we believe that by working together to address administrative and regulatory hurdles, we can create a more efficient and attractive business environment that benefits both the European and Vietnamese business communities.”
Meichle continued, “This survey, powered by our members’ real-world experiences, is the backbone of our advocacy work. It shapes our conversations with Vietnamese officials and EU policymakers. By bringing our members’ perspectives to the table, we are identifying key areas for growth and strengthening the Europe-Vietnam partnership through open dialogue and teamwork.”
“These survey results reveal a nuanced picture of the business landscape,” said Thue Quist Thomasen, CEO of Decision Lab. “While 68% of respondents report neutral to positive current conditions, there is a slight increase in short-term caution, which needs to be addressed to continue the positive trend from the previous quarters. However, the strong 6.42% GDP growth in the first half of 2024 and nearly 70% expressing long-term optimism indicate robust underlying confidence that may materialise in future readings.”
Action needed to continue improving Vietnam’s business climate
The survey paints a mixed picture, reflecting both resilience and ongoing challenges:
Top pain points for European businesses in Vietnam
While European businesses maintain optimism about Vietnam’s potential, the survey highlights persistent regulatory challenges that hinder growth and investment. Key pain points identified include:
The survey also highlights specific areas where regulatory hurdles are particularly pronounced:
Five ways to boost FDI in Vietnam: EuroCham members
To attract more FDI and stimulate economic growth, businesses surveyed highlighted five key areas where Vietnam could enhance its business environment:
EuroCham’s 2024 Whitebook offers recommendations to address these challenges, providing a roadmap for creating a more competitive and welcoming business landscape in Vietnam. Click here to read it.
Carbon neutrality progress is key to attracting quality European FDI
The survey reveals a growing commitment to sustainability among European businesses in Vietnam, with 7% having already achieved carbon neutrality. An impressive 37% have set targets to reach this goal by or before 2050, while an even more ambitious 18% aim to achieve carbon neutrality by 2030.
However, the surveyed businesses identified several key obstacles in their net-zero efforts, including:
On a positive note, the recent signing of the Direct Power Purchase Agreement (DPPA) decree offers a ray of hope. Swift and successful implementation could address some of these challenges, particularly by improving access to clean energy sources and potentially providing better sustainability incentives.
To further address these challenges and promote sustainable economic practices, EuroCham Vietnam is organising the Green Economy Forum & Exhibition (GEFE) 2024, scheduled for October 21-23 in Ho Chi Minh City.
The three-day event will feature conference sessions, an exhibition of green technologies, and high-level plenary discussions with European and Vietnamese leaders. It aims to equip businesses with the knowledge, connections, and tools needed to navigate Vietnam’s evolving business landscape while promoting environmentally responsible practices.
About the Business Confidence Index survey
The quarterly Business Confidence Index (BCI), which is conducted by Decision Lab, serves as a vital tool for understanding the perceptions of European and Europe-related companies and investors in the Vietnamese market. Conducted since 2011, the BCI collects feedback from EuroCham Vietnam’s extensive network of 1,400 members across a diverse range of sectors. This survey provides valuable insights into the current business landscape in Vietnam and offers a glimpse into future expectations.
Decision-makers, media, and business professionals see the BCI as a key indicator of economic activity in the country. It is a trusted source of information on the business environment in Vietnam, and its findings are widely used to inform government policies and investment decisions.
About EuroCham Vietnam
Founded in 1998, the European Chamber of Commerce in Vietnam (EuroCham) is the leading voice of European business in Vietnam. With offices in both Hanoi and Ho Chi Minh City, we represent a diverse range of companies, from SMEs to multinationals. EuroCham is a key player in shaping policy discussions, promoting trade and investment, and strengthening economic ties between Europe and Vietnam, particularly under the EU-Vietnam Free Trade Agreement.
As one of the largest foreign chambers in Vietnam, with over 1,400 member companies, EuroCham serves as a “chamber of chambers,” uniting nine national European business associations. These include:
EuroCham’s influence is underpinned by our extensive network of 20 specialised Sector Committees. These committees provide expert insights, shape policy recommendations, and foster sector-specific dialogue.
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