Vietnam Attracts US$1.31 Bln Fresh FDI in First Quarter, Triples On-Year

Vietnam Attracts US$1.31 Bln Fresh FDI in First Quarter, Triples On-Year

Vietnam licensed 109 foreign direct investment (FDI) projects with a total pledged investment of around US$1.31 billion in the first quarter of this year, representing a three-fold on-year increase, according to the Ministry of Planning & Investment (MPI).

Despite the increase in FDI, the number of foreign-invested projects in Vietnam approved in January-March period fell 9 per cent on-year, the MPI said.

During the period, Vietnam also licensed 72 existing FDI projects to raise funds totaling US$422 million (up two in number of projects and up 43 per cent in term of additional capital against the same period last year). This brings the total FDI for the country in the first quarter to US$1.732 billion, up 100 per cent on-year.

According to the Foreign Investment Agency under the MPI, the largest FDI projects licensed in the first quarter of this year include a US$655.9-million CDMA mobile phone network and a US$114.6-million skyscraper in Hanoi and a US$190-million shoe factory in Dong Nai.

There were some positive signals in structure of new FDI in the period, with 66 per cent is to be invested in services. The average scale of FDI has increased to US$12 million, several times higher than average capital in previous years. FDI from EU investors accounted up to 64.8 per cent of total new foreign investment flow in the period.

Localities, Hanoi takes the lead in terms of FDI attraction (62.9 per cent of new FDI), followed by Dong Nai and Ho Chi Minh City.

Despite huge pledged FDI, the disbursed capital in the period remained modest at US$692 million, up 7 per cent on-year, but much lower than the 15 per cent growth rate in FDI attraction in the first quarter of 2004. Moreover, total revenues of the FDI sector were valued at only US$4.1 billion (excluding earnings from crude oil) in the first quarter, up only 5 per cent on-year. The sector also reached total export revenues of US$2.194 billion (excluding crude oil), up 17.6 per cent.

Vietnam expects to attract between US$4.5-5 billion worth of foreign direct investment (FDI) capital this year compared with nearly US$4.2 billion in 2004. The disbursed capital is expected at US$3.1 billion.

By the end of March this year, the country will have attracted 5,262 FDI projects with aggregate registered investment of US$47.7 billion, of which over US$26 billion had been put into operation.

Investment, Youth