Business confidence index continues falling

April 19, 2011 | 14:24

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Vietnam’s business confidence index (BCI) in the first quarter of 2011 continued dropping 17 points to 109 points compared to last year’s fourth quarter, showing businesses’ anxiety and caution amid the current domestic economic developments.

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The survey, conducted on 333 enterprises from 11 key sectors and industries in Vietnam, showed that the USD/VND exchange rate adjustment and price hikes of input materials, including coal, electricity and petrol, as well as forecasts on inflation and growth greatly influenced on decisions to expand operations and confidence of businesses, especially small- and medium-sized ones.

Nearly 72 per cent of interviewed enterprises said their business and production operations were affected by the foreign exchange rate adjustment in the first three months of the year. Meanwhile, 46 per cent affirmed that they will raise prices of their products and services due to increasing input material prices.

Regarding the economic situation in Vietnam , only 25.83 per cent of the participants said the economy has improved while 45.95 per cent said the economy was worse, and 28.23 per cent saw no change at all.

With businesses confidence falling for six consecutive months, close to 45 per cent of businesses affirmed they had no intention to expand operations in 2011.

However, more than 54 per cent of the surveyed expressed their belief in a better economy in the next 12 months.

BCI is a quarterly survey conducted by the Vietnam World Vest Base Financial Intelligence Services (WVB FISL) and PetroVietnam Finance Investment and Consultancy Company (PVFC Invest).

VIR/VNA

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