FDI into Vietnam Forecast to Grow Strongly

Vietnam is still an attractive market for foreign investors, because its economy has recovered and developed in a relatively stable fashion.
March 25, 2024 | 00:13

Vietnam will experience a breakthrough in foreign direct investment (FDI) attraction to the fields of technology, renewable energy, health, banking and real estate, VNA reported, citing world media.

Investor-friendly policies, along with tax breaks and emerging industrial hubs beyond Hanoi and Ho Chi Minh City, have made Vietnam an attractive destination for foreign investors who are looking for sustainable long-term growth prospects.

The news site Vietnam Briefing, developed by Dezan Shira & Associates - a pan-Asia, multi-disciplinary professional services firm, recently wrote that Vietnam’s FDI landscape in 2024 is poised for robust expansion, with several opportunities in these above-mentioned sectors.

FDI into Vietnam Forecast to Grow Strongly
Illustrative image. Photo: baoquangninh.vn

It quoted Vietnam’s Foreign Trade Agency as saying that the country experienced a surge in FDI in January and February, recording an influx of over USD 4.29 billion, marking a significant increase of 38.6% compared to the previous year.

The FDI capital disbursed in the first two months amounted to USD 2.8 billion, up 9.8% year-on-year.

Attracting the most were Hanoi, Quang Ninh, Thai Nguyen, Ba Ria – Vung Tau, Bac Ninh, Dong Nai, Bac Giang, Ho Chi Minh City, Hai Phong, and Hung Yen. These 10 localities accounted for 81.7% of the foreign investment received during January-February. Out of them, Hanoi capital city led the pack with nearly USD 914.4 million, which was up 24.4 times that recorded in the same period in 2023.

According to the news site, this year, Vietnam presents investment prospects across multiple frontier industries. The technology industry is experiencing a great deal of innovation and digitalization. Similarly, the renewable energy sector is gaining traction, with a rising focus on clean energy sources like solar and wind power to sustainably bolster Vietnam’s power supply. Moreover, there is great anticipation regarding the demand-driven growth of the med-tech field and other healthcare-related industries.

Meanwhile, in its article titled “Vietnam ‘has been a development success story’: World Bank,” the US-based Washington Examiner website wrote “While economic freedom is declining around the world, Vietnam is bucking the general trend. The country still has a lot of work to do to join the ranks of economically free countries, but it is moving in the right direction. No other country of comparable size has made such strong gains in the Index of Economic Freedom in recent decades.”

“Growth in Vietnam no longer revolves solely around agriculture as it has positioned itself in high-tech fields, including Industry 4.0, semiconductor chips, AI, and hydrogen, and is attracting international capital. Foreign direct investment amounted to USD 36.6 billion in 2023,” it added.

The New York-based Nasdaq Stock Market assessed that Vietnam's growing economy not only brings benefits to its people but also brings profitable opportunities to investors in many fields, typically technology and textiles. The country's economic growth momentum is also boosted by its capacity to attract FDI.

PwC's "World in 2050" study also stated that Vietnam will achieve the second highest annual GDP growth rate worldwide and GDP will grow by an average of 5.3% per year over the 36-year period from 2014-2050. This important macro-economic indicator is a testament to the success of the Government's management in recovering and maintaining the stable development of the economy.

With the increasingly strengthened role of the economy in the supply chain diversification strategy of multi-national corporations, Vietnam's economic growth is expected to recover more positively this year.

A stable socio-political foundation is a core and important factor in Vietnam's prospect of creating a breakthrough in FDI attraction in 2024 and beyond, Nguyen Bich Lam, former General Director of the General Statistics Office expressed in an interview with VNA on the picture of FDI attraction and solutions to improve capacity and motivation to promote economic growth in the coming time.

Recently, global credit rating agency Fitch Ratings has upgraded Vietnam's sovereign credit rating to BB+ with a stable outlook. With the achievements, advantages and position of the economy, 2024 is expected to be a breakthrough year in FDI attraction of the country.

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