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European business confidence in Vietnam dips, but FDI outlook positive

According to the latest Business Climate Index (BCI) report by EuroCham and Decision Lab, European business confidence in the Vietnamese market has dipped by 4.5 points, standing at 43.5 due to challenging market conditions. The decline reflects the global impact on Vietnam's economy, which heavily relies on manufacturing and exports. The report highlights power shortages and infrastructural inadequacies as pressing concerns among European businesses. Additionally, administrative barriers and limited understanding are hindering the full capitalisation of the European Union-Vietnam Free Trade Agreement (EVFTA). Notwithstanding, an encouraging 9% increase in positive business outlooks for Q3 2023 was also noted, alongside 48% of respondents expecting an increase in foreign direct investment in Vietnam next quarter. Despite difficulties, Vietnam remains among the top five investment destinations globally for over a third of businesses.


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