FDI rockets up in August

HCMC – Foreign direct investment (FDI) in Vietnam has shot up this month to nearly US$2.5 billion, almost doubling the monthly average US$1.3 billion in the first half, and taking it to US$10.79 billion for the year so far.

It’s a sharp contrast to FDI in the previous three months: US$1.5 billion in May, US$800 million in June and just slightly over half a billion dollars last month.

August saw 125 projects licensed, according to a report from the Ministry of Planning and Investment’s Foreign Investment Agency.

In the year to date, 658 foreign-invested projects worth some US$10.79 billion have been licensed, up 41% year-on-year, according to the agency.

However, the amount of capital added into 143 existing projects in the period is only US$787 million, down 85.8% from the same period last year.

According to the agency, the total investment in the country so far this year, inclusive of additional funds into operational projects, is about US$11.6 billion, 87.7% of the same period last year.

The agency predicts Vietnam to receive US$22-25 billion in newly registered and additional FDI capital this year, an increase of 5-10% from 2009, owing to the recovery of the global economy. New FDI approvals in 2009 plunged as much as 70% from the previous year due mainly to the economic crisis.

The agency reported the real estate sector has attracted close to US$2.39 billion of registered capital in the first eight months, taking the third position of the total FDI commitment, after the processing and manufacturing industry sectors with US$3.66 billion and the sectors of power and water with US$2.94 billion.

According to the agency, FDI disbursements in Vietnam total about US$850 million this month, taking the January-August figure to US$7.25 billion, up 3.6% from the same period last year.

Given the average monthly disbursement of around US$900 million, it is predicted that FDI disbursement will reach US$11 billion this year, slightly higher than last year’s figure of US$10 billion.

It is widely recognized that in FDI attraction, disbursement is more significant than commitment, and quality is more important than quantity.

Foreign invested enterprises have this year benefited from the regional recovery, as seen in their trade values. Exports have surged 26.6% over the same period to some US$23.96 billion. If crude oil export is excluded, this value is still more than US$20.6 billion, up 39.9% year-on-year.

Meanwhile, the FDI sector has also spent US$22.37 billion on imports, up 43.6% year on year.