European business leaders’ confidence in VN returning after COVID-19

Friday, Jul 24, 2020 08:39

The EuroCham BCI fell to its lowest-ever score of 27 per cent in Quarter 1 of this year. — Photo EuroCham

European business leaders were positive about Viet Nam’s trade and investment environment in the first few months after COVID-19, according to data from the Business Climate Index (BCI) of the European Chamber of Commerce in Viet Nam (EuroCham).

During the middle of the COVID-19 pandemic, when social distancing and travel restrictions brought normal business operations to a halt, the EuroCham BCI fell to its lowest-ever score of 27 per cent in Quarter 1 of this year.

However, after the Government implemented a world-leading public-health and economic response, Viet Nam was able to return to business-as-usual much sooner than other countries, who continue to struggle with the impact of the virus.

As a result, the positive sentiment of European business leaders began to bounce back, recording a 7 per cent jump between February and April to reach 34 per cent.

Meanwhile, more than half of executives predicted that Viet Nam’s macro-economic climate would “stabilise and improve” in the next quarter.

The BCI also found that more than a quarter of European enterprises had benefitted from the Government’s postponement of tax, while around one-in-five had benefitted from a reduction in rent and a suspension of social insurance contributions.

Despite these positive signs, however, challenges remain for European enterprises. While the impact of COVID-19 has lessened a little, a large proportion (88 per cent) felt negative effects as a result of the pandemic in the three months to April.

Meanwhile, more than 50 per cent said that a reduction in taxes such as corporate income tax (CIT), personal income tax (PIT) and value-added tax (VAT) would help them emerge stronger from the crisis.

“This data is further evidence that Viet Nam is one of the international success stories of the COVID-19 pandemic. It also shows that the Government’s effective and sure-footed handling has had a tangible impact on the confidence of European business leaders," said Nicolas Audier, chairman of EuroCham. — VNS

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