Vietnam FDI Disbursements Forecast to Rise 15% in 2016: Expert

Tuan Minh

10:41 09/01/2016

BizLIVE - Disbursements of FDI in Vietnam are likely to increase 10%-15% in 2016 from a record high in 2015, a former government official said.

Vietnam FDI Disbursements Forecast to Rise 15% in 2016: Expert

Vietnam expects stronger FDI inflow in 2016. (Photo: Internet)

The growth rate of disbursed foreign direct investment (FDI) in Vietnam could reach between 10% and 15%, even higher this year from a record high in 2015, Phan Huu Thang, former head of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, told the Dau Tu (Investment) newspaper.
Disbursements of FDI in the country rose 17.4% year-on-year to $14.5 billion in 2015, thanks to two multi-billion-USD projects of Samsung in northern Vietnam and the Taiwan-invested Formosa steel complex in the central province of Ha Tinh.
The FDI influx to Vietnam is poised to grow as the country has finalized a number of free-trade agreements with major economies such as South Korea, the European Union, and other 11 countries of the Pacific Rim including the U.S. and Japan.
The allure of Vietnam also comes from its political stability, low labor cost, rapid economic growth and rising consumerism. Its GDP is projected to grow 6.7% in 2016, higher a five-year high of 6.68% in 2015.
“The corollary is that exports have doubled over the past six years and we think this trend is set to continue with the 2015 signing of the Trans-Pacific Partnership (TPP) trade agreement,” said Josh Crabb, head of Asian equities and manager of the Old Mutual Pacific Equity and Old Mutual Asian Equity Income funds.
FDI is promising this year as Thailand’s PTT Plc and its partner Saudi Arabia’s Aramco are still mulling over the profitability of the $22-billion oil refinery project in the central province of Binh Dinh due to the oil crash.
The Vietnamese government has urged agencies and localities to accelerate approvals of BOT power plant projects, whose investment hovers around $2 billion each.
Other players which have been present in Vietnam for years are considering expansion in the country. Among them, Thailand’s Amata intends to pour billions of USD into industrial parks projects in Dong Nai and Quang Ninh provinces.
In addition, South Korea industrial conglomerate Hyosung plans to build another factory worth $500 million and the U.S.’s Jabil Circuit considers another $500 million investment in the Southeast Asian country.
Vietnam’s foreign investment attraction has a good start this year with the approval of several projects.
Singapore’s Maple Co. on January 6 won a license for its $110-million garment project in VSIP Bac Ninh. The plant is scheduled to come into operation in 2018 when the landmark Trans-Pacific Partnership (TPP) is expected to be enacted.
Malaysia’s United More Sdn on January 7 was licensed to produce plastic frames and covers for TVs in Ho Chi Minh City’s Saigon Hi-Tech Park (SHTP). Its $21-million plant will supply TV frames for a Samsung Display complex in the park.