European companies' business in Vietnam recovers strongly

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The index recorded the highest score since the outbreak of the COVID-19 pandemic.

Of which, the score above 50 shows a positive state in the production and business environment and below 50 reflects a pessimistic and negative perception.

According to Vietnam News Agency, in the first quarter, when COVID-19 first hit international trade and investment, the BCI fell to 26 points. It saw a slight increase in the second quarter as Vietnam became one of the global success stories of the pandemic.

Now, with businesses 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, according to EuroCham.

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

EuroCham said Q4 looks to be even more promising, with 44% predicting a strong end to 2020. Meanwhile, most companies are anticipating stabilisation 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 entering into force in the third quarter, the BCI also asked EuroCham members about its impact on their business and investment plans. One third said that the agreement was an important part of their decision to invest in Vietnam, with the top two factors predicted to drive growth being tariff reductions and greater market access for investors./.


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