Forty-two per cent of European firms anticipate they will raise foreign direct investment (FDI) in Vietnam by 2022 end, a survey has found. Respondents indicated Vietnam could bolster these FDI levels by reducing administrative difficulties (68 per cent), improving infrastructure (53 per cent), developing human resources capacity (39 per cent) and reducing visa barriers for foreign experts (39 per cent).

The Business Climate Index (BCI) survey was published by the European Chamber of Commerce in Vietnam and produced by YouGov Decision Lab.

Despite a quarter of respondents identifying green growth as a key factor in attracting FDI to Vietnam, the number of respondents rated Vietnam's green potential positively decreased from 44 to 32 per cent.

Respondents recommended Vietnam should improve its legal framework (92 per cent), infrastructure (87 per cent) and investment incentives (86 per cent) to accelerate green development.

The perception of benefits of the European Union-Vietnam Free Trade Agreement (EVFTA) has declined by four percentage points compared to the previous quarter. Administrative procedures were cited as the primary reason for this (38 per cent), followed by a lack of understanding of the agreement (18 per cent) and technical barriers to trade (16 per cent).

“It is true that we are less optimistic now than we were at the beginning of 2022 due to external factors slowing global growth. The fourth quarter will also likely be less positive than the second or third quarters of the year. Still, these survey results are encouraging. Vietnam will certainly be in a better position in two or three years, demonstrating its place among the most exciting and dynamic business and investment destinations," EuroCham chairman Alain Cany was quoted as saying by a Vietnamese media outlet.

BCI results also showed a decline in optimism among European business stakeholders. Nearly 42 per cent of participants anticipate that the economy will stabilise or improve in the fourth quarter this year. This is an 18-point decrease from the previous quarter when 60 per cent held this view.

Similarly, the percentage of those anticipating economic deterioration increased by seven points to 19 per cent.

Only 2 per cent of respondents reported that they had relocated a significant portion of their operations from China to Vietnam, suggesting that there is still considerable room for growth.

Fibre2Fashion News Desk (DS)

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