FDI surge, data point to Vietnam economic revival
Foreign direct investment in the first 11 months shot up by 54 percent from a year earlier, indicating, along with other signs, that the economy could be turning around.
Official data shows investment exceeding US$20.81 billion in the year-to-date, 77 percent of it going into manufacturing and processing.
The country had set a full-year target of $13-14 billion.
Japan remained the largest investor with $5.68 billion, followed by Singapore and South Korea.
ANZ bank said in a report November 26 that “an upswing in Vietnam is now in play, led by very strong FDI.”
Besides strong FDI flows, the bank also quoted other economic indicators like lower inflation to say that the country has seen “some improvement.”
It expected consumer prices to rise by 6.6 percent this year compared to 6.8 in 2012.
FDI this month was up by as much as 90 percent year-on-year, which ANZ said was thanks to news that the government is considering a higher maximum rate of foreign ownership in local businesses.
The rate is now capped at 30 percent for banking and 49 percent for other industries.
In June the Ministry of Industry and Trade had loosened regulations for trading by foreign enterprises.
Foreign retailers now have to do the economic needs test, the measure aimed at protecting local businesses, on the basis of the population density of a district rather than a city to open additional outlets. There is no such requirement for opening the first outlet.
The ministry is drafting a revised circular on sales and purchase activities to lengthen the list of goods foreign firms can distribute.
Rice, sugar, tobacco, books, and magazines are among the items prohibited.
- Vietnam News: FDI firms may open local currency accounts (thecurrencynewshound.com)
- Vietnam Tests Investors With Tighter State Grip (bloomberg.com)