Vietnam’s Economy Sees Strong Growth in the First Half of 2018 – FDI
FDI in the first six months of 2018, which included new and additionally registered capital, capital contribution, and share purchases, reached US$20.33 billion, growing by 5.7 percent compared to H1-2017. FDI disbursed stood at US$8.37 billion, up 8.4 percent.
Investment certificates were granted to 1,366 newly registered projects with total investments of US$11.8 billion, down 0.3 percent compared to the same period in 2017. However, the number of projects in H1 of 2018 grew by 15.5 percent.
Additional registered capital reduced by 13.8 percent to US$4.43 billion, while capital contribution and share purchases reached US$4.1 billion, up 82.4 percent compared to the same period in 2017.
Sources
Out of the 87 countries and territories that invested in Vietnam in H1, Japan led at US$6.47 billion, accounting for 31.8 percent of the total registered capital. South Korea followed at US$5.06 billion, while Singapore invested US$2.39 billion.
Destinations
Hanoi attracted the highest FDI among the 55 provinces and cities that received foreign investments, with a total registered capital of US$5.87 billion, accounting for 28.9 percent of the total. Ho Chi Minh City was second with registered capital reaching US$3.68 billion, followed by Ba Ria – Vung Tau at US$1.93 billion.
Industries
The manufacturing and processing industry continue to lead in FDI attraction in H1, with total registered capital reaching US$7.91 billion, accounting for 38.9 percent of the total. Real estate followed at US$5.54 billion, while the wholesale and retail sector attracted US$1.5 billion in investments.
Outward FDI
Outward FDI in H1 stood at US$ 263.08 million, which included US$222.48 million in 67 new projects and US$40.6 million in 16 capital adjustment projects.
Leading sectors were banking/finance and agriculture, forestry, and fisheries, which invested US$106.17 million and US$63.47 million respectively. Processing and manufacturing sectors invested US$48.9 million outside Vietnam.
Majority of the outward investments flowed to Laos, which accounted for 31.89 percent of the total investment capital, at US$83.9 million. Slovakia, Cambodia, and Australia followed at US$35.93 million, US$32.3 million, and US$31.63 million respectively.
2018 outlook
Growth in the second half of 2018 is predicted to be lower than first due to a deceleration in growth in agriculture and industry, primarily in mining. Growth in Q3 and Q4 is predicted to reach 6.53 percent and 6.36 percent respectively.
In addition, with the H1-2018 consumer price index reaching 3.29 percent, inflation can increase in the latter half of 2018, which will inhibit long-term growth. Vietnam also needs to defend itself from trade protectionist policies which can have a negative effect on exports and increase imports.
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