Downward trend in FDI persists

March 27, 2023 | 18:29

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According to the Ministry of Planning and Investment's Foreign Investment Agency (FIA), foreign direct investment (FDI) stood at $5.45 billion in the first quarter of 2023, equivalent to just 61 per cent on-year. The reason is said to be the lack of billion-dollar projects, with the $1.32 billion Lego investment making up 41 per cent of FDI in the first quarter last year.

Over 520 new projects were granted investment registration certificates in the same period with the total registered capital of over $3 billion, down 5.9 per cent on-year. The adjusted capital of almost 230 ongoing projects stood at about $1.2 billion, down 70 per cent on-year. There were approximately 600 capital contributions and share purchases as of March 20, equivalent to $1.25 billion, showing a decrease of over 23 per cent for the same period last year.

In addition to the decrease in FDI, the country's disbursed capital also saw a slight decline of 2.2 per cent to $4.3 billion.

The FIA census also indicated that FDI was seen in 17 out of the 21 economic sectors in the first quarter. Of those, processing and manufacturing took the lead with $4 billion, capturing 73 per cent of total FDI, but saw a 25 per cent drop compared to the same period in 2022. Real estate ranked second with $766 million, making up 14 per cent of the total, but witnessed a decrease of over 71 per cent on-year. This was followed by wholesale and retail, and logistics and warehouses, with $276 million and $151 million respectively.

Singapore was the top foreign investor in Vietnam with close to $1.7 billion, accounting for 31 per cent of FDI into the country in the first quarter, but representing a decrease of over 26 per cent on-year. China came second with $552 million and Taiwan third with $477 million, followed by South Korea, Hong Kong, and the Netherlands.

Foreign-invested projects still choose cities and provinces that have more advantageous infrastructural development, human resources, and clear administrative procedures, like Bac Giang, Dong Nai, Bac Ninh, Ho Chi Minh City, and Haiphong.

FDI inflows drop significantly on-year

The total foreign direct investment (FDI) inflows in the first two months of 2023 fell by 38 per cent on-year, while FDI disbursement also declined by almost 5 per cent.

Vietnam faces more challenges to attract FDI

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