Hanoi (VNS/VNA) - European firms' confidence in Vietnam has reached thehighest level since the fourth COVID-19 outbreak in April last year, accordingto EuroCham's latest Business Climate Index (BCI) report.

Thereport said firms viewed the current “new normal” and less severe Omicronvariant as manageable, which has allowed businesses to resume fasterafter a gloomy 2021, resulting in an increasing BCI in Q1 this year.

TheBCI is expected to sustain this improving trend in Q2, with members moreoptimistic about the business outlook.

"Generally,business leaders are steadily improving their attitudes towards the futuregrowth of the Vietnamese economy. While more than two-thirds of them believe inthe likelihood of a thriving economy in the next three months, only 5 percentof business leaders expect future economic declines," said the report. 

Leadersare more buoyant with the current improving scenario as business perceptionsare recovered according to the economy’s pace. As 2022 begins, a brighterfuture is expected, as operations are entirely back to the new normal insignificant hubs of the country.

Inaddition, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to boosttrade and investment on both sides and help the Southeast Asian economy furtherintegrate into the global economy and the international community.

TheEVFTA will eliminate almost all tariffs between the EU and Vietnam. It removedtariffs on 65 percent of the value of EU exports the moment the FTA enteredinto force, with the remaining tariffs being phased out over the followingdecade.

Meanwhile,71 percent of EU imports from Vietnam became tariff-free once the EVFTAentered into force. This will rise to more than 99 percent over the following7 years.

Meanwhile,customs duties will be almost eliminated over a transitional period of 7 yearsfor Vietnamese goods and 10 years for EU goods. This will be a ‘win-win’ forbusinesses and consumers in the form of lower prices and greater competitiveness.

Accordingto EuroCham, 72 percent of business leaders have a concrete understanding ofthe EVFTA and its implications, and almost half believe it isrelevant to their business. 

Moreimportantly, about 6 percent of European business leaders in Vietnambelieve that EVFTA has already benefited their businesses.

TheBusiness Climate Index is a regular barometer of the business sentimentamong European companies operating in Vietnam.

Becauseof the active participation of EuroCham members in this survey since 2013, theBCI is seen by decision-makers, media, and business professionals in Vietnam asa key indicator of economic activity in the country./.