Vietnam FDI inflow hits record high so far in 2015
Vietnam received an estimated record US$9.65 billion in actual foreign direct investment (FDI) so far this year, with strong inflows going to the manufacturing sector, a key driver for the country's economic growth.
FDI inflows rose 8.4% from a year ago, a Planning and Investment Ministry report said on September 25, the highest level since late 1987 when a law was implemented to allow FDI to enter the Southeast Asian country.
FDI is an important source of foreign exchange for Vietnam, helping to boost its capital account and offset a trade deficit that had widened to an estimated US$3.9 billion so far in 2015.
New FDI pledges in the January-September period rose 44.5% from a year ago to US$11.03 billion, the ministry's report said, citing major projects such as the US$2.4 billion Duyen Hai 2 thermal power plant.
Vietnam has embarked on liberal reforms to strengthen capital markets and position itself as a low-cost manufacturing alternative to China, especially for cell phones, televisions, footwear and garments.
New FDI commitments in manufacturing account for 70% of the total US$84.8 billion attracted by Vietnam between 2011 and August 2015, the Asian Development Bank said on September 22.
It raised Vietnam's GDP growth forecast this year to 6.5% from 6.1% earlier, citing rising private consumption, export-oriented manufacturing and FDI.
Foreign firms expanding in Vietnam include Samsung, LG, Microsoft and Intel.
An additional US$3 billion placed by Samsung Display, a subsidiary of the world's top smartphone maker Samsung Electronics Co Ltd, has helped boost the FDI inflow, the report said.
Samsung Display plans to put another US$3 billion into Vietnam by 2020.
Vietnam has projected drawing US$23 billion in FDI pledges in 2015, up nearly 40% from last year, while actual inflows are expected to be on par with 2014 at US$12.5 billion, the report said, citing Planning and Investment Minister Bui Quang Vinh.
Over the next five years, Vietnam aims to lift its growth rate to an annual average of 6.5-7.0% by capitalising on multilateral trade deals, modernising agriculture and boosting investments, its communist party has said.