Vietnam’s business confidence index (BCI) fell by 17 points, to 109 points in the first quarter of 2011.
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| Vietnam’s business confidence index continues to fall in Q1 |
Vietnam World Vest Base Financial Intelligence Services (WVB FISL) and PetroVietnam Finance Investment and Consultancy Joint Stock Company (PVFC Invest) on April 19 announced a survey on Vietnam’s BCI in the first quarter.
This is the second consecutive sharp decline in BCI.
The survey interviewed 333 businesses in 11 key areas of Vietnam, with 78% of those being small and medium-sized enterprises. The questions focused on the companies’ reactions to the VND/USD exchange rate changes, price increase of essential goods such as coal, petroleum and electricity and also issues related to inflation and economic growth.
Nearly 72% of interviewees said that the exchange rate adjustments have badly impacted their business and production activities in the first three months of the year. Roughly 46% of companies affirmed that they will increase prices of their products due to higher input materials.
Only 26% said that the Vietnamese economy in the first quarter was better than last year, while up to 46% disagreed, saying that the economy was getting worse.
Compared to the fourth quarter of 2010, the number of business owners that described themselves as optimistic decreased by 23%, while pessimistic ones increased by 32%. However, 54% still believed that the country’s economic situation would get better in the next 12 months.
The survey also showed that 68% of businesses believed that their revenues would grow and 64% expected profit improvement in the next 12 months.
Vietnam achieved GDP growth of 7% in 2010, but its high inflation rate, estimated at 11.75%, along with other factors continues to adversely affect the business climate.
