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FDI into Vietnam will increase rapidly

10:41 - 12/08/2016

According to a macroeconomic report by Standard Chartered Bank announced on 9/8, the economic growth of Vietnam this year is forecast at 6% and foreign direct investment (FDI) can be continued to expand strongly in the second half of this year, while exports may decline slightly in the next 6 months.

Standard Chartered experts believe Vietnam is still an attractive investment destination in the context of the world economy is not bright. In particular, FDI flows into Vietnam will increase in the second half of this year after declining slightly in the first 6 months.

FDI made in 2015 is higher than 2014, but the new registered capital investment declined. However, Standard Chartered expects both registered FDI and implemented in Vietnam in 2016 increased more than last year. In particular, FDI in manufacturing sector will increase sharply in the second half of 2016.

So far, 65% of FDI inflows to Vietnam to invest in manufacturing industries. The bank's specialists expect this trend to continue in the next quarter, especially when the cost of production in China is increasing.

Vietnam's current investment destinations preferred by the production company in southern China by trying to move operations out of the country. Over 40% of customers operating in China Standard Chartered Bank wants to move to Vietnam and Cambodia are the second favorite to be.

Experts also said that Standard Chartered Vietnam should continue to attract FDI inflows into high-tech industries to support the growth in exports of electronic goods.

While FDI into Vietnam this year is forecast positive growth, the report said that export growth of Vietnam in the second half of this year will be reduced due to weak demand from Western countries, although production export has increased steadily in the first 6 months.

Accordingly, Vietnam had a trade surplus in the first half of this year thanks to rising exports electronics possible while slowing imports. However, in the second half of this year, Vietnam is forecast deficit by weak exports, while imports increased sharply in service FDI projects being implemented.

Also, according to the report, Vietnam's economy this year is forecast to grow by 6% and 6.6% forecast for next year. Manufacturing and construction sectors continue to be the driving force of economic growth in Vietnam, in return for agricultural growth is slowing due to the most severe drought in 90 years.

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