[NEWS] Foreign investment in Vietnam continues to grow despite the pandemic
Total foreign direct investment into Vietnam reached US $ 12.33 billion in the first four months of this year, down 14.5% over the same period due to the impact of the COVID-19 pandemic, according to the Ministry of Foreign Affairs and Investment. Investment Agency (FIA).
The figure, however, is much higher than the same period in 2018 and 2017 with $ 5.8 billion and $ 9.2 billion, respectively, the FIA said.
The four-month period witnessed 984 newly licensed foreign investment projects with a total registered capital of 6.78 billion USD, down 9% in the number of projects but up 27% in annual value.
Among them, the powerful LNG project of Lieu Lieu marked the first billion-dollar project in 2020 with an investment of US $ 4 billion, accounting for 59% of the total registered FDI.
Meanwhile, the current 335 projects are allowed to increase investment capital more than 3.07 billion USD, up 46% over the same period last year.
From January to April, foreign investors spent nearly $ 2 billion to buy shares or contribute capital to Vietnamese companies, down 65% from the previous year.
According to the agency, disbursement of foreign investment reached 5.15 billion USD after 4 months or equivalent to 90.4% last year.
Foreign investors committed to pouring capital into 18 fields, of which manufacturing and processing led with nearly 6 billion USD, accounting for 48.4% of total capital. Next is electricity production and distribution (US $ 3.9 billion); wholesale and retail (776 million USD); and real estate ($ 665 million), the FIA said.
Singapore is the country with the largest FDI source because the committed volume accounts for 41% or 5.07 billion USD. Thailand and Japan are runner-ups with $ 1.46 billion and $ 1.16 billion respectively, followed by mainland China, Taiwan and South Korea.
Of the 54 provinces that received foreign investment over a four-month period, the southern Liaoning Province ranked first with $ 4 billion. Ba Ria-Vung Tau province followed with 1.9 billion USD and Ho Chi Minh City ranked third with 1.31 billion USD, followed by Hanoi, Ha Nam and Binh Duong provinces.
Exports of foreign-invested sector increased by 1.5% compared to last year to 55.75 billion USD, accounting for 69.3% of the country’s four-month export value. Meanwhile, the industry’s import value also increased by 3% to 46.32 billion USD, accounting for 58% of import volume nationwide.
Despite the negative effects of the COVID-19 pandemic, this sector has reached a trade surplus of US $ 10.2 billion, according to the FIA.
Research from Standard Chartered predicts that FDI inflows will fall below $ 10 billion this year, with downside risks if virus worries continue within the last half of this year.
Construction activity is likely to decline due to subdued sentiment and declining FDI. Export growth is probably going to slow thanks to lower global demand while import growth can also be moderate with slower growth, keeping the balance of trade in surplus in 2020.
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