Vietnam poised to lure $39-40 bln FDI this year, beating 2023

Vietnam is well-positioned to attract $39-40 billion in foreign direct investment (FDI) this year, equivalent or higher than in 2023, said a government official.

“Both foreign institutions and the ministry are fairly optimistic about FDI expectations in the second half of this year,” said Deputy Minister of Planning and Investment Tran Quoc Phuong at a regular government press meeting last Saturday.

Vietnam’s FDI outlook remains bright this year thanks to foreign investors’ diversification strategies after the Covid-19 pandemic and their hope for the country’s ongoing strong economic recovery, he added.

The official elaborated that despite mounting external headwinds, Vietnam’s macroeconomic fundamentals remain steady, which is buoying investor sentiment.

Vietnam’s consumer price index (CPI), a gauge of inflation, increased 4.08% in the first half of this year, and core inflation came in at 2.75% amid surging prices for strategic commodities.

A survey by the Ministry of Planning and Investment (MPI) showed that confidence among foreign investors in Vietnam’s economy remains “very positive”, indicating their desire to continue investing in the country, Phuong said.

Registered FDI in Vietnam rose 32.1% year-on-year to $36.6 billion in 2023, while actual FDI edged up 3.5% to $23.18 billion, the highest in years, according to MPI data. The number of fresh projects jumped 56.6% to 3,188 last year.

In the first six months of this year, registered FDI rose 13% year-on-year to $15.19 billion, with newly-licensed investment spiking 46.9% to $9.54 billion, while disbursed FDI was $10.84 billion, up 8.2%.

Regarding economic growth, after a stellar performance in Q2/2024, Phuong said that it is highly likely Vietnam will hit the upper band of the whole-year target of 6-6.5% this year.

Vietnam’s GDP growth reached 6.93% in the second quarter of 2024 and 6.42% in the first half of 2024, the second-highest for the six-month period since 2020, according to official data.

In a more positive scenario, the ministry has estimated that the local economy can grow 7% this year, driven by a positive trend of the global and regional economy; non-state sector investment; a rebound of the export sector; a strong recovery of tourism; the earlier enactment of three new real estate-related laws; and an aggressive stance by the government.