Vietnam attracts 1.69 billion USD in foreign investment in Jan

Illustrative image (Photo: VNA)

Vietnam lured 1.69 billion USD worth of foreign investment in the first month of 2023, down 19.8% year-on-year, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

One bright spot in January was that 153 new foreign-invested projects, valued at 1.2 billion USD, were granted licenses, up 48.5% in number and 3.1 times in value, which was a signal to confirm the confidence of foreign investors in the investment environment of Vietnam, the FIA said. 

During the month, capital added in operating projects by foreign investors saw a yearly decline of 76% to 306.3 million USD while their capital contributions and share purchases also declined 61% year-on-year to over 174 million USD. 

At the same time, disbursed capital also witnessed a decline of 16.3% to an estimated 1.35 billion USD in the first month, the FIA said, adding that the processing and manufacturing industry saw 1.05 billion USD worth of foreign investment disbursed, making up 77.6% of the total. 

Since January saw two long holidays - New Year and Lunar New Year, the decrease recorded in registered foreign investment capital, or even disbursement, had not yet reflected the general trend of foreign investment capital flows to Vietnam in 2023, according to the agency. 

Projects related to wholesale, retail, and repair of automobiles and motorised vehicles accounted for the lion’s share of the total registered sum, at 54.1% or 651.9 million USD. They were followed by those in the processing and manufacturing industry, which together registered 351.2 million USD in capital or equivalent to 29.1% and those in other sectors at 202 million USD or 16.8%. 

Also in January, 28 foreign countries and territories invested in Vietnam. Singapore was the largest with 767.6 million USD, followed by China with 198.2 million USD.

Meanwhile, Vietnamese investors poured 126.7 million USD into their projects overseas, increasing by 3.4 times against the same month in 2022.

Among three countries and territories receiving investment from Vietnam, the Republic of Korea was the leading country with 125.1 million USD, accounting for 98.7% of total investment capital; followed by Thailand (1.5 million USD or 1.2%); and Laos (140,000 USD or 0.1%). 

Foreign investment bonanza

Vietnam is expected to attract a lot of FDI this year due to its impressive economic performance in 2022, improved business climate and the advantages brought by the free trade agreements it has signed, experts said.

Do Van Su, Deputy Director of the Department of Foreign Investment, said Vietnam is likely to attract 36-38 billion USD worth of FDI in 2023.

The Republic of Korea, Japan and Taiwan (China) are expected to be among the main sources of investment as they continue to pump money into Southeast Asia.

Economist Le Dang Doanh said the country needs to further speed up administrative reforms, improve its investment environment and ensure policy stability.

Minister of Planning and Investment Nguyen Chi Dung said priority would be given to projects that use new and green technologies and have high added value.

Though there are admittedly still problems related to human resource quality, Vietnam remains an appealing destination for foreign investors due to its supportive policies, he added.

A recent survey done by the Ministry of Planning and Investment found 76% of enterprises saying they were satisfied with the Government’s support policies. 

They were most satisfied with the VAT waiver and reduction policies, and those to stabilise gasoline prices, improve the work permit issuance process and customs clearance procedures, and support import- export and workers’ livelihoods.

To continue to attract foreign investment, Dung said it is vital for Vietnam to develop innovation and financial centres at the regional and international levels. 

It is also important to stabilise the economy and improve infrastructure and the quality of human resources, he added.

Last year, FDI was worth nearly 22.4 billion USD, according to the General Statistics Office.

Of the more than 100 nations and territories investing last year, Singapore topped with 6.46 billion USD, followed by the RoK (4.88 billion USD) and Japan (4.78 billion USD). 

They invested in 54 provinces and cities of which Ho Chi Minh city attracted the most, 3.94 billion USD. 

Binh Duong was second with 3.14 billion USD and Quang Ninh was third with 2.37 billion USD.

VNA