Free trade agreement expectations boost European business confidence

Friday, 2014-10-24 10:15:38
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A scooter factory of Piaggio in Vietnam
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NDO - The business confidence of European companies in Vietnam rose in the third quarter of 2014 in expectation of the signing of a free trade agreement between Vietnam and the European Union (EU).

According to a survey by the European Chamber of Commerce (Eurocham) in Vietnam, the Business Climate Index climbed from 66 to 74, approaching levels seen in the first quarters of 2011.

The survey also indicates that the majority of European companies have put behind the public disorder incidents that affected foreign investors in a number of Vietnam’s provinces earlier this year.

Compared with the previous quarter, the percentage of companies reporting their business situation as positive rose slightly to 48% while those considering their situation as negative declined sharply from 21% to just 8%.

Survey results show that 61% of European businesses believe the macroeconomic situation in Vietnam will stabilise and improve while only 15% expect it to worsen.

With improved macroeconomic stability and business outlook, European businesses estimated that the inflation rate would rise moderately from 4.26% to 4.61%.

Eurocham Executive Director Csaba Bundik noted there was a clear trend of improvement thanks to excitement in the European business community leading up to the signing and realisation of the Vietnam-EU free trade deal.