10-month FDI disbursement slightly down due to pandemic

10-month FDI disbursement reduced slightly due to the pandemic

In the first 10 months, foreign direct investment (FDI) disbursement reached $15.15 billion, a decrease of 4.1 per cent on-year, and only 0.6 percentage points more than in the first nine months, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

The pandemic and social distancing have almost completely halted production and business activities across the country. However, the health crisis is being contained and enterprises are receiving ample support to adapt to the new normal, it added.

"Businesses are resuming their activities, and FDI disbursement in the last months of the year is expected to rise," said a representative of the FIA.

In general, total FDI inflows into Vietnam during the first 10 months of the year rose by 1.1 per cent on-year to $23.74 billion.

As of October 20, $13 billion was poured into 1,375 newly-licensed projects, down 34.5 per cent in the number of projects and up 11.6 per cent in value over the same period last year. Besides this, $7.09 billion was added into 776 projects currently underway, a decrease of 14.4 per cent in the number of projects and a rise of 24.2 per cent in value against the year prior. Foreign investors also poured $3.63 billion into share purchase deals, down 40.6 per cent on-year.

The FIA reported that newly- and additionally-registered FDI remained on an uptrend, however, the on-year increase for the first 10 months was lower than for the first nine months.

The decrease in the number of new and expanded projects were attributed to travel restrictions and long quarantine policy, which made it hard for foreign investors to survey projects.

Among the 18 sectors receiving investment from foreign investors in the first 10 months of this year, processing and manufacturing took the lead with $12.74 billion, accounting for 53.7 per cent of the total FDI. It was followed by power production and distribution with over $5.54 billion, making for 23.3 per cent, followed by real estate, and wholesale, retail.

Singapore led the 97 countries and territories investing in Vietnam in the period, with a total investment capital of nearly $6.77 billion, followed by the Republic of Korea ($4.15 billion), and Japan ($3.4 billion).

The Mekong Delta province of Long An attracted the highest amount of FDI during the period with over $3.68 billion, including $3.1 billion in a big energy project. Ho Chi Minh City was second with $2.73 billion, followed by the northern port city of Haiphong with $2.72 billion.

The export turnover of foreign-invested enterprises (FIEs) continued to increase in the first 10 months, however, on-year growth for the period was lower than for the first nine months with $198 billion (including crude oil), up 20.1 per cent on-year, or $196.7 billion (excluding crude oil), up 20.3 per cent.

FIEs' import turnover was estimated at $176.9 billion, an increase of 31.3 per cent on-year. Generally, in the first 10 months, the trade surplus of the FDI sector was about $21.2 billion (including crude oil), or $19.8 billion (excluding crude oil), while the trade deficit of local enterprises was $23.2 billion.