|EuroCham's BCI survey in the first quarter of this year
The latest results of the Business Environment Index (BCI), created by the European Chamber of Commerce in Vietnam (EuroCham), indicate that the COVID-19 pandemic has had a significant negative impact on the activities of the European business community.
Mirroring the situation in the rest of the world, the pandemic has served to harm international trade and investment, with EuroCham’s BCI dropping to 26%, its lowest level recorded in the first quarter of 2020, representing a 51-point fall from the figure of 77% recorded at the end of 2019.
This result directly reflects the impact that the COVID-19 pandemic has had on business activities with over 90% of leading firms stating that the pandemic has had a negative impact on their company. Furthermore, roughly 80% of those surveyed believe that their operation costs are higher due to measures implemented in a bid to protect workers and prevent the virus from spreading further.
Despite the negative economic fallout from the COVID-19, European firms are still taking measures necessary in order to protect the health and livelihoods of their workers. Four out of the five business leaders polled remain confident that they will be able to retain at least 70% of their employees moving forward into the next quarter, whilst 80% of enterprises have requested that their employees work from home in an attempt to slow the spread of the virus.
An extension to tax payments and land rent is the most common measure that will benefit firms surveyed, followed by a suspension of social insurance payments. Simultaneously, EuroCham also posed questions to businesses about what measures can be taken in order to support enterprises, with approximately three quarters stating that an extension of tax payments such as corporate income tax, personal income tax, VAT, and special consumption tax would be hugely beneficial.
Regarding the result of the BCI survey in the first quarter, EuroCham Chairman Nicolas Audier said the data indicates that the COVID-19 epidemic has had a serious and profound impact on the activities of the European business community in Vietnam. However, due to the nature of the ongoing global pandemic, businesses around the world are suffering from the effects of the crisis.
Without the fast and decisive actions taken by the Vietnamese government, the situation nationally could have been far worse. Therefore, the European business community is highly receptive of the measures taken by the country which will ultimately serve to aid European firms and their employees overcome this challenging period, he noted.
The BCI is a regular barometer of how European business leaders see the trade and investment environment in Vietnam and the prospects of their own enterprises. Each quarter, the chamber asks its membership to answer a range of questions covering issues such as their investment plans, revenue projections, and workforce levels.