The attraction of FDI maintains the recovery trend
All eyes are now on the reports of the government and the NA Economic Committee presented during the current session of the National Assembly (NA), as they have all expressed their concern over the downward trend in IDE entries.
According to the government report, the total capital of FDI registered in the first three quarters of the year suffered a decline of 15.3% year-on-year, of which the newly registered capital accounted for only 57% of the figure registered at the end of the year. same period last year. This indicates that Vietnam has not taken full advantage of the various opportunities offered by the trend of shifting investment capital flows globally.
Meanwhile, the NA Economic Committee in its report called on the government to carefully assess the situation and point out the causes and solutions. “The decline in FDI registered capital may affect FDI disbursements and economic growth in the future,” said Vu Hong Thanh, chairman of the committee.
Concerns were partly allayed after the Foreign Investment Agency under the Ministry of Planning and Investment announced statistics indicating that the situation has gradually improved.
According to statistics, as of October 20, the total of newly registered capital, adjusted capital and capital contributions from the purchase of shares by foreign investors reached more than 22.46 billion US dollars, a decrease of only 5.4% compared to the same period last year.
Vietnam attracted 1,570 FDI projects throughout the review period, with total registered capital of nearly $9.93 billion, down 23.7% year-on-year from down 43% in the first nine months of the year.
Do Nhat Hoang, head of the Foreign Investment Agency, attributed this fall to COVID-19-related restrictions in place in foreign countries that have jeopardized companies’ investment plans. In addition, global market fluctuations caused by the geopolitical conflict in Europe, high inflationary pressure and supply chain disruption have negatively affected the outward investment capital flows of major economies, in particular those which constitute the main investment partners of the country.
Sharing this view, Alain Cany, President of the European Chamber of Commerce in Vietnam (EuroCham), played down concerns, noting that the country should not look at registered capital, but rather focus on disbursed capital which is likely to reach a record level. This year. He also revealed that European companies operating in Vietnam remain much more optimistic than they were during the pre-pandemic period.
The Foreign Investment Agency reported that 10-month FDI disbursements amounted to $17.45 billion, up 15.2 percent year-on-year. If this level of growth continues in the remaining months of the year, the year-end figure will likely be between US$21 billion and US$22 billion, an annual increase of approximately 6.4% to 11, 5%.
During a recent trip to Vietnam, Mathias Cormann, Secretary General of the Organization for Economic Co-operation and Development (OECD), spoke highly of the country’s growth prospects in the future, especially the attraction of FDI. Cormann pointed out that OECD companies are looking for opportunities in the Vietnamese market as part of efforts to diversify their supply chains.
Meanwhile, Mark Ridley, CEO of Savills Global, said during his recent visit to Hanoi that Vietnam is expected to become Southeast Asia’s fastest growing economy in 2023. The country’s strong growth , according to Savills, can be seen in stark contrast to the economic performance of other Asian countries.
Vietnam is currently receiving a lot of attention from investors around the world as global growth is estimated at 2.5% in 2023, and major markets such as the UK and Europe are expected to decline in over the next two quarters, Riley said.
EuroCham’s Business Confidence Index (BCI) survey in the third quarter of the year also indicated the same. Although the BCI in the third quarter fell to 62.2 points, up to 42% of European business leaders surveyed said they would increase FDI inflows into the country by the end of the year. .
Cany expressed his belief that Vietnam will definitely be in a better position in the next two or three years and will therefore prove to be a very dynamic business and investment destination.
To attract more FDI, the government has recently enacted special investment incentive regulations, approved a set of selective FDI attraction criteria, and set up a special task force to eliminate difficulties faced by foreign investors. foreign investors, especially large companies.
The Ministry of Planning and Investment will work alongside other ministries, agencies and localities to continue to make recommendations, develop plans and effectively implement groundbreaking tasks to attract FDI in an effective and sustainable manner, a said Minister Nguyen Chi Dung.