Vietnam forecasts disbursed foreign direct investment to rise to a record this year as the government steps up efforts to attract factories to the Southeast Asian nation.
Disbursed FDI will exceed $16 billion this year, Deputy Minister of Planning and Investment Dang Huy Dong said in an interview in Hanoi on Thursday. Pledged foreign investment will increase up to $28 billion, he said. That compared with last year’s $24.4 billion of pledged foreign investment and a record high of disbursed FDI at $15.8 billion.
“FDI growth is very impressive so far this year and we expect it to continue,” Dong said. “We aim to draw more FDI into areas including export-oriented, energy and high-technology” by building a more business-friendly environment, he said.
Vietnam is shrugging off the uncertainty over the Trans-Pacific Partnership as low wages and a young workforce help retain its allure as a manufacturing base. The World Bank predicts economic growth will exceed 6 percent until 2019, among the world’s fastest.
Competition in Southeast Asia is intensifying as governments from the Philippines to Indonesia ramp up infrastructure spending. In Vietnam, Prime Minister Nguyen Xuan Phuc last week formed an economic advisory team, which includes economists from universities in the U.S., Japan and Singapore to help craft policies to boost growth. The central bank last month cut key policy interest rates for the first time in three years.
The government aims to boost economic growth to 6.7 percent this year while the Asian Development Bank forecasts the nation’s economy will expand 6.3 percent.
“These FDI forecasts are realistic. With macro stability, low inflation rate, stable local currency—Vietnam is luring foreign investors more and more,” said Nguyen Mai, chairman of Vietnam’s Association of Foreign Invested Enterprises. “The government just needs to spur companies by helping them trim costs.”