Disbursement of foreign direct investment (FDI) in Vietnam is forecast at US$900 million in May, raising the total in the first five months of this year to US$4.52 billion, according to data released by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
However, the FDI disbursement had shown signs of a downturn in the last three months. The figure decreased from some US$1.4 billion in March to over US$1 billion in April, and then continued falling to US$900 million this month.
This change indicates a continuous slump in FDI disbursement. In January, the amount rose 5 percent but it then rapidly eroded and increased only 0.4 percent in May.
It is very difficult to say if this is a new trend because the production and business situation of foreign-led enterprises in the first five months of the year was better than last year.
Improved production has helped the FDI sector obtain export turnover of US$19 billion in the first five months, a year-on-year rise of 34.2 percent. With crude oil excluded, their export revenue has grown 33.7 percent to US$16 billion. Import spending of foreign-invested enterprises (FIEs) has totalled US$17.6 billion, a 32.5 percent year-on-year rise.
Remarkably, the decline in disbursement is leading to a drop in liquidity. Foreign-invested companies enjoyed a trade surplus of nearly US$1.4 billion in the five months but they suffered a trade deficit of US$1.6 billion in case crude oil was excluded.
Capital attraction weakens
The amount of registered FDI capital slumped. This month also witnessed the lowest level of new FDI with only US$322 million coming from 51 new foreign-invested projects, equal to only a fifth of the April value.
Even additional capital, which was registered by existing projects, was extraordinarily higher the fresh registered capital. 13 projects registered to increase US$343 million in May, down 47 percent in projects but up nearly 50 percent in value from the same period in 2010.
New registered investment capital was smallest in four months, totalling US$664 million in May, smaller than the amount of disbursed capital in the reporting month and equal to nearly a half in the preceding month.
Meanwhile, total FDI in the country, including additionally invested projects, topped nearly US$4.7 billion in the first five months, or 23.5 percent of the nation’s target of this year.
Given low indicators this month, Vietnam should work out its ability to attract FDI capital.
Vietnamese
