FDI a driving force for double-digit growth: parliament member

Vietnam's FDI attraction will likely remain "very good" in 2025 thanks to investors' trust in the country's internal strength, says Prof. Dr. Hoang Van Cuong, member of the National Assembly's Finance and Budget Committee.

Cuong made the statement online at the Vietnam Economic Forum Thursday in Ho Chi Minh City.

Ministry of Planning and Investment data shows that in the first 11 months of the year, the country’s total registered FDI, which includes newly-registered capital, additional capital of operational projects, and capital contributions/stake acquisitions, hit $31.4 billion, up 1% year-on-year.

Cuong noted that the 1% growth, following a 32% year-on-year increase in the same period last year, indicated that FDI attraction remains "very good".

"Over the past 30 years, although FDI attraction has had some unsatisfactory issues, it is clear that FDI has had a positive impact on the economy, especially exports, as the FDI sector accounts for 70% of the country's export turnover."

Every time Vietnam's economy develops dramatically, it is mainly thanks to exports, he added.

The National Assembly, the country’s legislature, in a resolution released on November 12 assigned the government to work for a GDP growth rate of 6.5-7% next year. It asked for efforts to achieve 7-7.5%. But the government seeks to achieve an 8% GDP growth, Prime Minister Pham Minh Chinh said early this month.

"This is reasonable because Vietnam's economy is currently returning to the strong growth period of 2016-2019," Cuong argued.

Other factors like Vietnam's stable exchange rate help investors feel secure. International credit rating organizations have continuously raised Vietnam's ratings. The country are effectively exploiting free trade agreements (FTAs), and in the coming time, will continue to diversify markets, limiting risks. It is also solving problems related to logistics costs to attract FDI, he stressed.

Cuong noted that FDI trends are changing. Previously, investors sought cheap labor, but now they invest in science and technology and high technology. This will be the driving force to help Vietnam achieve double-digit growth.

Recently passed laws will also remove bottlenecks, creating momentum for economic development. Vietnam can achieve double-digit growth thanks to high-tech FDI, he added.

Tran Dinh Thien, former director of the Vietnam Institute of Economics, said the country is shifting in a very positive direction in international integration relations.

"We have attracted many large enterprises, but it is necessary to recognize that while commitments are good, implementation is still limited. Human resources are still an area that needs improvement," he noted.