FDI activity nationwide shows signs of recovery

30-Aug-2014 Intellasia | TBKTSG | 6:00 AM Print This Post

Foreign direct investment (FDI) activity in Vietnam is showing signs of recovery after having declined remarkably for seven straight months of this year compared to the same period last year.

New FDI approvals at any time in the first half of this year were lower than in the corresponding period of last year by between 35 percent and 50 percent, but the gap narrowed to 20 percent in July before being further down to 19 percent by August.

According to the general Statistical Office, as of August 20, there were 992 newly-registered FDI projects worth more than $7.24 billion, up 29 percent in project number and down 2.1 percent in project value year-on-year. Coupled with 350 operational projects that injected an extra $3 billion, the total amount of FDI pledged in the January-August period was $10.23 billion, a decline of 19 percent year-on-year.

Economic experts predicted that in the rest of this year, fresh FDI approvals in Vietnam will increase and can meet the government’s target of not being lower than last year’s figure of around $22.35 billion.

In the year to date, the processing and manufacturing sector attracted the most FDI amount with more than $7 billion, 68.4 percent of the total.

It is followed by the realty sector with $1.154 billion and the construction sector with nearly $553 million.

Meanwhile, FDI disbursements in Vietnam have accelerated to reach $7.9 billion, up 4.5 percent year-on-year. This is considered a positive sign in FDI activity as it shows that foreign investors are still confident in potentials and advantages of the Vietnamese business environment.

In the first eight months of the year, foreign-invested enterprises earned $65.2 billion from exports, rising 15.6 percent from a year earlier and accounting for 67.3 percent of the country’s total export revenue, while they spent $53.4 billion on imports, up 10.9 percent year-on-year.

Among 49 countries and territories having newly-registered projects in Vietnam as of August this year, South Korea is the biggest foreign investor with nearly $2.5 billion pledged, accounting for 34.1 percent of the total, followed by Hong Kong, Japan, Singapore, Taiwan and Indonesia.

Fresh FDI approvals steadily rise in city

* The HCM City government has forecast fresh foreign direct investment (FDI) approvals in the city this year will rise some 20 percent to $2.5 billion and that the number is expected to rise to $2.7 billion next year.

Since the beginning of the year, several big-ticket FDI projects have been licensed in the city, including a $200 million apartment project by Bay Water Co. Ltd and a $140 million project in the processing and manufacturing sector by Worldon Vietnam Co. Ltd Villa Arcadia Co. Ltd obtained a license to develop a real estate project worth $102 million.

FDI companies are expected to fare well this year and next, with respective revenues of $22.1 billion and $24 billion.

Apart from new and expanding projects, 18 FDI projects with total investment of $72 million have moved to other provinces and cities or have proposed stopping operations in HCM City this year to date.

 


Category: Economy

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