German businesses are confident about their own business development in Vietnam

Economic Expectation

The challenges for German companies in Vietnam are numerous more than a year and a half after the start of the COVID-19 pandemic. Most recently, the economic recovery has lost pace: Only 33 percent of German companies surveyed in Vietnam still
expect the economy in Vietnam to develop better over the next twelve months. That expectations are more subdued than they were in spring 2021.

German companies in other ASEAN countries such as Malaysia, Singapore and Thailand have also significantly fewer positive expectations than they did at the beginning of 2021.

Business Outlook

In term of their own businesses, however, companies in Vietnam are proving resilience. They expect a further revival of their own actitives desprite the cooling economy. They are confident about the business development in the coming twelve months. 55 percent of German companies in Vietnam expect their own businesses to improve.

83 percent of survey participants intend to invest further in their activities in Vietnam and 33 percent assume an increase in employment in the upcoming 12 months.

Challenges

However, given the existing challenges posed by the coronavirus pandemic, companies are on a rocky road. Travel restrictions and problems in the supply chains and logistics are preventing smooth business operations and an overall self-sustaining, investment-driven upturn in international business.

In the context, further consequences that affected the German businesses in Vietnam are cancellation of orders and the decrease in demand of goods and services.

Irrespective of the immedieate effects of the coronavirus pandemic, economic policies, raw material prices and the shortage of skilled workers currently represent the top 3 business risks for German companies in Vietnam./.