Business leaders in Vietnam are pinning high hopes on the country's economic growth this year, and their optimism is ranked by Grant Thornton International the third highest in the world.

The accounting and consulting firm's International Business Report shows 87% of Vietnam's business leaders expressed optimism and confidence in the country's economic growth in the year ahead.

"Their optimism can be attributed to the robust economic growth in recent years and widespread expectations that the momentum will be sustained during 2008," said the report released on Tuesday by Grant Thornton.

The percentage for Vietnam is behind the 95% of Indian and Philippine businesses optimistic about the opportunities in the next 12 months.

The business optimism for Vietnam comes before the fast growing China as well as Singapore and Malaysia in Grant Thornton's report.

Ken Atkinson, managing partner of Grant Thornton Vietnam, told the Daily that the contributing factors behind the high business optimism for Vietnam were based on the forecast for growth in revenue, profitability and employment.

Despite high inflation, business leaders in Vietnam are expecting revenue and profitability growth and employment levels at 98%, 97% and 87% respectively.

Atkinson credited the growth to increasing domestic and foreign direct investment (FDI) as well as remittances by overseas Vietnamese.

"When asked why they feel optimistic about the opportunities in Vietnam for 2008, the largest majority cited 'general economic conditions' as their primary reason, but any slightly ahead of the political situation," the report says.

The report shows business leader respondents in Vietnam have the highest confidence in their political situation in the region, with 49% indicating that it is the positive factor in their optimism compared with heir neighboring countries like Singapore at 33% positive and Thailand 25% negative.

"Vietnam will continue with a stable political system and move to further attract foreign direct investment as well as taking measures to control inflation and the booming real estate market," Atkinson said.

Though Grant Thornton International has conducted the business report survey globally for seven years, this is the first time the survey has covered Vietnam.

The report serves as an overview of the opinions and expectations of chief executive officers, managing directors, chairpersons or other senior executives from medium to large-sized privately held businesses to provide service lines with a platform to develop business.

"Foreign business executives have voiced their strong belief in Vietnam's high growth in 2008 though the country is facing a series of major challenges related to inflation and underdeveloped infrastructure.

RaIf Matthaes, managing director of TNS Vietnam, said at an international business luncheon in HCMC on Tuesday that the future for Vietnam would be very bright.

"I think it is easy for Vietnam to achieve growth of 8.4-8.5% this year," Matthaes told Daily after speaking at "The Year Ahead: Executive Summary and Outlook 2008" seminar organized by the Canadian Chamber of Commerce in Vietnam (CanCham) in collaboration with other foreign business groups including AusCham, BBGV, EuroCham and HKBAV.

Matthaes said in front of 200 business participants of the event that there were many opportunities in Vietnam as the country was changing rapidly and growing sustainably.

Other speakers at the event thought so. Thomas Tobin, president and chief executive officer of HSBC Vietnam, said the country's growth remained strong as "positive factors supporting continued growth greatly outweigh the negative factors."

Tobin pointed out the Combination of economic reforms, young population, rapid growth of labor inputs, high levels of capital investment would help Vietnam to achieve economic expansion targets of 8% for the next five years.

Don Lam, CEO of VinaCapital Group, said Vietnam's GDP was forecast to grow at least 8.7% and named continuing industry expansion and increasing export, strong consumer and Government spending, and strong capital inflow as the drivers.

Nguyen Quoc Dung of the Southern Foreign Investment Center under the Ministry of Planning and Investment said the national targets for foreign investment attraction was US$15-17bil a year between now and till 2010.

Last year saw Vietnam's FDI commitment reach US$20.3bil, or 53% higher than the expectation and the highest during last 20 years.

Source: SGT.