Vietnam’s FDI disbursement shows signs of slowdown
According to the Foreign Investment Agency under the Ministry of Planning and Investment (MPI), FDI disbursement reached a high record of USD15.8 billion in 2016, up 9% from 2015.
In the first four months of 2016, FDI disbursement saw an on-year rise of 12% and the on-year growth of the same period of 2015 was 7%.
Deputy Director of the Vietnam Institute of Economics Le Xuan Sang said the suspended Trans-Pacific Partnership (TPP) has seriously affected Vietnam’s FDI attraction and disbursement.
Many foreign companies wanted to invest in Vietnam to take advantages of the agreement.
According to Professor Nguyen Mai, Chairman of the Vietnam Association of Foreign-Invested Enterprises, the lower FDI disbursement was attributed to tighter environmental regulations in licensing foreign-invested projects after environmental problems.
Meanwhile, several experts noted that the US Federal Reserve’s decision to raise interest rates in March this year has also affected FDI disbursement in Vietnam as the USD debts of companies have increased, causing their investment costs to be more expensive. As a result, they must be more careful in their investments.
Le Quoc Anh from the National University of Economics said to attract more FDI and boost FDI disbursement, Vietnam should consider offering more incentives for foreign investors and offer preferential loans for companies which aim to export their products to the US.
“The government needs to have plans to support investment programmes of companies suspended due to the TPP’s collapse. It is also important to boost the free trade agreement negotiations to lure more foreign investors,” Anh added.
Source: VietnamNet
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