Vietnam well positioned for more FDI: UOB research exec

By Anh Minh
Thu, January 11, 2024 | 6:16 pm GMT+7

Vietnam is in a good position to attract more foreign direct investment (FDI), given its competitiveness and an ongoing supply chain shift to the Southeast Asian region, an expert said.

Suan Teck Kin, executive director at UOB Global Economics & Market Research, was presenting his views Thursday at the Vietnam Economic Scenarios 2024 conference held in Hanoi.

He noted that Vietnam had a record year in 2023, receiving $36.6 billion worth of FDI, up 32% year-on-year, despite external trade headwinds.

 Suan Teck Kin, executive director at UOB Global Economics & Market Research, speaks at the Vietnam Economic Scenarios 2024 conference in Hanoi, January 11, 2023. Photo courtesy of VnEconomy.

Suan Teck Kin, executive director at UOB Global Economics & Market Research, speaks at the Vietnam Economic Scenarios 2024 conference in Hanoi, January 11, 2023. Photo courtesy of VnEconomy.

The figures indicate that a lot of companies still see Vietnam as an attractive destination over the next five years as supply chain shifts continue with the ongoing regionalization trend, he said.

Citing UNCTAD data, Suan said ASEAN attracted a record high FDI of $222.3 billion in 2022 thanks to the de-globalization and regionalization of supply chains, with Vietnam ranking third after Singapore and Indonesia.

“Friendshoring” activities will see continued FDI inflows into Vietnam and bring further opportunities to businesses and workers.

Given its stable FDI inflows and a young and dynamic population, Vietnam has potential to compete for inward FDI in Southeast Asia as the Malaysian market is maturing while Thailand’s population is aging.

However, with the population aging, Vietnam needs to look to other factors to maintain competitive, by identifying right sectors and solutions to focus on, the researcher suggested.

Suan said Vietnam pulled through a difficult year in 2023, with growth of 5.05%. The country saw a strong rebound in economic growth in Q4/2023 and the momentum will continue into 2024, with a whole-year expansion of 6-6.5%.

In the mid- to longer-term, Vietnam should raise capital spending to improve productivity and efficiency for further upside ahead, the researcher suggested.

New drivers needed

Speaking at the event, Can Van Luc, chief economist at state-controlled bank BIDV, stressed that external conditions are forecast to remain challenging for Vietnam, including slower global growth, lingering inflation, and high interest rates.

  Can Van Luc, chief economist at state-controlled BIDV, speaks at the Vietnam Economic Scenarios 2024 conference in Hanoi, January 11, 2023. Photo courtesy of VnEconomy.

Can Van Luc, chief economist at state-controlled BIDV, speaks at the Vietnam Economic Scenarios 2024 conference in Hanoi, January 11, 2023. Photo courtesy of VnEconomy.

Those factors can exert negative effects on Vietnam’s exports, investment, consumption, foreign tourist arrivals, and financial markets, Luc noted.

However, even against that backdrop, Vietnam will remain a bright spot with better growth prospects and controlled inflation, he added.

To beef up growth, Luc suggested that existing drivers be renewed and economic restructuring be accelerated after a long period of setback due to the pandemic and delayed handling of weak businesses and projects.

The government should promote and exploit new drivers such as institutional transformation, which entails the implementation of amended laws on land, housing, real estate business and credit institutions, as also incentives to offset adverse impacts of the Global Minimum Tax.

“[We] need a new legal corridor for new business models and sandbox pilot schemes for them,” Luc said.

Other recommendations included a project to elevate national labor productivity, with particular focus on training a highly-skilled workforce, creating a more conducive atmosphere for innovation; and promoting green growth.

Comments (0)
  • Read More
Petrovietnam, Petronas to boost renewable energy cooperation

Petrovietnam, Petronas to boost renewable energy cooperation

Petrovietnam and Petronas, two state-owned oil & gas enterprises of Vietnam and Malaysia, will further cooperate in renewable energy, including exchange of information, knowledge, and experiences.

Energy - Fri, November 22, 2024 | 2:59 pm GMT+7

FTSE Vietnam ETF may heavily buy Vinhomes, sell Vingroup in upcoming reshuffle: broker

FTSE Vietnam ETF may heavily buy Vinhomes, sell Vingroup in upcoming reshuffle: broker

FTSE Vietnam ETF is forecast to strongly buy in several Vietnamese heavyweights such as Vinhomes, Hoa Phat, and Vietcombank in its upcoming portfolio reshuffle.

Finance - Fri, November 22, 2024 | 2:45 pm GMT+7

$681 mln central Vietnam urban area project eyed by Sun Group gets authorities' nod

$681 mln central Vietnam urban area project eyed by Sun Group gets authorities' nod

A VND17.3 trillion ($681 million) urban area project that is drawing the interest of major realty developer Sun Group has received an in-principle approval from Khanh Hoa province's administration.

Real Estate - Fri, November 22, 2024 | 1:53 pm GMT+7

Vietnam foreign ministry dismisses allegations of tightening visa rules for foreigners

Vietnam foreign ministry dismisses allegations of tightening visa rules for foreigners

Allegations of Vietnam tightening visa policies and control over foreigners are "baseless", Foreign Ministry spokeswoman Pham Thu Hang said Thursday.

Politics - Fri, November 22, 2024 | 11:29 am GMT+7

Thailand-invested food giant CP fined $31,000 for environmental violations

Thailand-invested food giant CP fined $31,000 for environmental violations

Vietnam’s southern province of Dong Nai has issued a fine of VND790 million ($31,080) to Thailand-invested C.P. Vietnam Corporation for violating environmental regulations.

Companies - Fri, November 22, 2024 | 10:48 am GMT+7

Vietnamese billionaire’s daughter spends $25 mln on Masan share purchases

Vietnamese billionaire’s daughter spends $25 mln on Masan share purchases

Nguyen Yen Linh, the daughter of chairman Nguyen Dang Quang of consumer goods giant Masan Group (HoSE: MSN), has purchased nearly 8.5 million MSN shares over the past three weeks, meeting 85% of her target.

Finance - Fri, November 22, 2024 | 10:27 am GMT+7

PYN Elite manager upbeat about Vietnam’s economy, stock market despite Trump uncertainty

PYN Elite manager upbeat about Vietnam’s economy, stock market despite Trump uncertainty

The Vietnamese economy will still fare well, and the local stock market will remain appealing despite the recent pullback following Donald Trump’s election win for a second term, said Petri Deryng, portfolio manager of Finland-based the PYN Elite fund.

Finance - Fri, November 22, 2024 | 8:25 am GMT+7

Central Vietnam province plans to build $2.4 bln LNG power plant from 2031

Central Vietnam province plans to build $2.4 bln LNG power plant from 2031

The 4,800-MW Chan May LNG power plant, with an investment of $2.4 billion, can be deployed in 2031-2035, according to Thua Thien Hue authorities.

Energy - Thu, November 21, 2024 | 10:41 pm GMT+7

Indonesia, France step up cooperation in economy, defence

Indonesia, France step up cooperation in economy, defence

Indonesian President Prabowo Subianto discussed economic and defence cooperation during a bilateral meeting on Tuesday with French President Emmanuel Macron on the sidelines of the G20 Summit in Rio de Janeiro, Brazil, Antara reported.

Southeast Asia - Thu, November 21, 2024 | 10:25 pm GMT+7

Thai economy to maintain upward momentum in 2025

Thai economy to maintain upward momentum in 2025

The National Economic and Social Development Council of Thailand (NESDC) expects the Thai economy to sustain its upward momentum in 2025 with a growth of 2.3-3.3% despite growing risks.

Southeast Asia - Thu, November 21, 2024 | 10:24 pm GMT+7

Former parliament chairman Vuong Dinh Hue warned for violations

Former parliament chairman Vuong Dinh Hue warned for violations

The Politburo, Vietnam's supreme decision making body, on Wednesday issued warnings to Vuong Dinh Hue, former Chairman of the National Assembly, and Nguyen Van The, former Minister of Transport, for violations while on duties.

Politics - Thu, November 21, 2024 | 10:10 pm GMT+7

Sumitomo insists on building LNG power plant in central Vietnam

Sumitomo insists on building LNG power plant in central Vietnam

Japanese trading house Sumitomo has been pushing for a liquefied natural gas (LNG)-fed power plant investment in Vietnam’s central province of Khanh Hoa.

Energy - Thu, November 21, 2024 | 8:53 pm GMT+7

Vietnam’s Vinhomes fulfils 67% of record buyback plan

Vietnam’s Vinhomes fulfils 67% of record buyback plan

Vinhomes, the housing development arm of conglomerate Vingroup, has purchased back 246.98 million shares, meeting 66.75% of the plan and accounting for 5.7% of the outstanding volume.

Finance - Thu, November 21, 2024 | 8:43 pm GMT+7

Vietnam high-speed railway should run beyond Hanoi, HCMC on either side: lawmakers

Vietnam high-speed railway should run beyond Hanoi, HCMC on either side: lawmakers

Vietnam’s mega North-South high-speed railway project should be redesigned and extended beyond Hanoi and Ho Chi Minh City as currently planned, several lawmakers have suggested.

Infrastructure - Thu, November 21, 2024 | 6:11 pm GMT+7

Vietnam-Malaysia relationship upgraded to comprehensive strategic partnership

Vietnam-Malaysia relationship upgraded to comprehensive strategic partnership

Vietnam and Malaysia have upgraded their relationship to a comprehensive strategic partnership, the highest level in the former’s diplomatic hierarchy.

Politics - Thu, November 21, 2024 | 5:21 pm GMT+7

Petrovietnam units sign LNG supply deal for trial run of Vietnam’s first LNG power plants

Petrovietnam units sign LNG supply deal for trial run of Vietnam’s first LNG power plants

PV Power and PV Gas, two units of state-owned Petrovietnam, have signed an LNG supply deal for trial operation of Nhon Trach 3 and Nhon Trach 4, Vietnam’s first LNG-to-power plants.

Energy - Thu, November 21, 2024 | 4:40 pm GMT+7