Furthermore, 88% of respondents expressed their confidence in Vietnam’s business landscape, while nearly half of all enterprises questioned expected that the country’s economic growth would remain stable.

Elsewhere, some 21% of the surveyed firms believed that the Vietnamese economy would see significant improvements over the course of the year.

According to German businesses, thanks to the rapid implementation of the Government's action plans coupled with stable macroeconomic conditions, the country has maintained a positive economic growth rate, fueling German firms’ optimism about the economy’s positive outlook.

However, German investors remained cautious in the short term due to risks from global economic fluctuations such as low global demand (51%), concerns about economic development policy (46%), a general shortage of skilled workers (34%), and risk of supply chain disruption (28%).

They predicted that the Vietnamese economy would rebound in the medium term thanks to the EU-Vietnam Free Trade Agreements (EVFTA), the implementation of the "China Plus One" strategy, the global trend of diversifying production supply chains to highly competitive production centres in Southeast Asia, and green investment flows.

Meanwhile, 57% of German investors in Vietnam would like to prioritise diversifying their supply chains, and Vietnam is their top choice, along with Malaysia and Thailand.

To further enhance the attractiveness of Vietnamese investment environment, the German Chamber of Commerce and Industry in Vietnam (AHK Vietnam) proposed that the government deal with the shortage of skilled workforce, and take advantage of Industry 4.0 and digital transformation.

Moreover, the AHK also recommended prioritising the competitiveness of local suppliers in order to maintain their role in the global and German supply chains, while also complying with sustainability regulations such as Germany’s environmental, social, and governance (ESG) standards.

AHK Vietnam went on to propose a detailed roadmap for implementing the recently adopted Power Development Plan VIII to encourage renewable electricity production, along with simplifying and digitising administrative procedures as a way of maximising the benefits from the EVFTA and improving the local business climate.

Source: VOV