Rising
net foreign direct investment will act as a foundation for a shaky local
economy to anchor itself on firm ground.
Foreign investors last month disbursed $950
million in Vietnam, raising total net foreign direct investment (FDI) from
January to September to $8.2 billion, up 2 per cent year-on-year.
In June and July, net FDI slightly declined
1.9 and 1.6 per cent on-year. It started to rebound in August 2011.
“FDI inflows into Vietnam are still very
positive,” said Do Nhat Hoang, director of the Ministry of Planning and
Investment’s Foreign Investment Agency.
Though the newly committed FDI from January to
September slid 28 per cent year-on-year to $9.9 billion,
Hoang believed FDI disbursement could reach
$11 billion by the year’s end.
His forecast was pinned to commitments of
investors like Panasonic Corporation, AES Corporation, Posco Power, Jaks
Resource and First Solar becoming a reality.
Given the government is cutting and delaying
nearly $4 billion in public investment including investments by state-owned
companies to rein in inflation, which hit 22.42 per cent on-year in September,
analysts have said FDI disbursement is a driving force for economic growth.
The General Statistics Office reported that
the economy grew at 5.76 per cent in the first nine months of this year against
6.52 per cent a year earlier. This year’s economic growth is targeted at 6 per
cent to ensure jobs and social welfare.
Vu Dinh Anh, an economist at the Institute for
Market and Prices, said this target would not be reached if FDI disbursement
slowed down.
“Overall, foreign investors are still
confident in Vietnam’s long term prospects and will continue investing here,”
said Anh.
Anh said increased FDI disbursement would not
spark inflation due to its high economic efficiency. In a recent report, the
Asian Development Bank pointed out that while state-owned enterprises’ return
on equity hang around 14 per cent, foreign invested enterprises (FIEs) recorded
a ratio of 22 per cent.
The net FDI inflows are also appreciated for
helping Vietnam compensate trade deficit and expect a surplus in the balance of
payments this year.
Vietnam’s trade deficit was estimated at $6.8
billion by September this year, equivalent to 9.8 per cent of the country’s
total export turnover.
The State Bank expected Vietnam’s surplus in
its balance of payment could reach $2.5-4 billion.
FIEs have also accounted for 54 per cent of
the country’s total export turnover with $38 billion during the past three
quarters, a 37.5 per cent rise year-on-year.
Ngoc Linh | vir.com.vn
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