Foreign investment inflows into Vietnam are projected to remain robust although the U.S.’s Fed
continues to raise interest rates as the Vietnamese government ramps up efforts to improve the business environment, the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has said in a filing on its website.
Overseas investors pay special attention to Vietnam’s competitive edges such as stable politics, a geographic position that facilitates trade, abundant labor force with high skills and low cost, and continued improvements in the country’s institutions, the agency notes.
As the country deepens its economic integration, the government is boosting efforts to better the investment climate, getting closer to international practices. This will make Vietnam more appealing to foreign investors, particularly trans-national companies, it adds.
The U.S. Federal Reserve (Fed) in mid-March raised its benchmark rates for the third time after the global financial crisis in 2008 and two more are predicts to be on the cards this year.
However, fresh FDI
commitments to Vietnam jumped 77.6% year-on-year to $7.7 billion in the first three months this year, according to the agency’s statistics.
Investors of operational projects in the country will continue their operations here to take advantage of cheap labor force and preferential land policy although increases in interest rates may lead to higher financial costs.
“Despite higher interest rates, [foreign] businesses won’t stop operations and repatriate their capital. Therefore, the rate hikes may exert a limited impact on FDI disbursement,” the agency argues.
Actual FDI increased 3.4% between January and March to $3.62 billion, the agency cites its own data as saying.
Vietnam’s World Bank
Doing Business ranking improved nine places from a year earlier to 82 in 2017, thanks to streamlined procedures related to Getting electricity, Paying Taxes, Protecting Minority Investors and Trading across Borders.