European businesses's optimism of favourable business environment

The Business Confidence Index (BCI) report for the third quarter of 2024 reflects positive signals in the business sentiment of European companies, despite ongoing economic challenges due to the aftermath of Typhoon Yagi and operational barriers. Specifically, the BCI has significantly increased from 45.1 in Q3 2023 to 52 in Q3 2024, marking a robust recovery in a year full of volatility due to external factors.

Super Typhoon Yagi severely impacted infrastructure and agriculture in northern Vietnam. The government forecasts a GDP decline of 0.15% this year, with total damage estimated at up to $ 1.63 billion. However, in EuroCham's most recent business survey conducted from September 12 to 25, following the typhoon, nearly half (47.4%) believe the macroeconomic situation will improve in the coming quarter. Additionally, long-term prospects remain high, with 69.3% expecting a favorable business environment within the next five years.

This positive outlook is further reinforced by 67% of European companies recommending Vietnam as an attractive investment destination, despite certain challenges still existing.

However, as in previous quarters, the survey indicates that the three biggest obstacles for European companies are administrative burdens, unclear regulations, and difficulties in obtaining permits.