Vietnam's FDI inflows plunge 11.1% in seven months

A production line of Hong Kong-invested Gunzetal Việt Nam Co in the southern province of Bình Dương. — VNA/VNS

HANOI (Vietnam News/ANN): Vietnam raked in US$16.7 billion in foreign direct investment (FDI) in the first seven months of 2021, down 11.1 per cent from the same period last year, data from the Ministry of Planning and Investment (MPI) shows.

This is the biggest fall in FDI inflows since the Covid-19 pandemic broke out again in the country in late April, wreaking havoc on multiple industrial parks in the northern provinces of Bac Giắng and Bắc Ninh.

Earlier, FDI inflows declined 2.6 per cent year-on-year in the first half of the year, after it edged up 0.8 per cent in the January-May period.

According to the MPI’s Foreign Investment Agency, of the 7-month figure, $10.13 billion came from 1,006 newly-registered projects, up 7 per cent year-on-year.

Some $4.54 billion was added to 561 existing projects, representing a year-on-year decrease of 3.7 per cent. Capital contribution and share purchases by foreign investors dropped by 55.8 per cent to $2.05 billion.

Economists believed that the Covid-19 pandemic is taking a toll on Vietnam’s FDI attraction. The fourth coronavirus wave has knocked the confidence of European businesses, with the EuroCham Business Climate Index (BCI) falling almost 30 points to 45.8 in the second quarter of this year.

Despite the contraction, the FDI disbursement slightly rose by 3.8 per cent from a year earlier to $10.5 billion.

The largest proportion of the seven-month FDI, $7.9 billion or 47.2 per cent, landed in processing and manufacturing, followed by electricity production and distribution, with $5.49 billion or 32.8 per cent.

Singapore topped foreign investors, pouring $5.92 billion into Vietnam, followed by Japan ($2.54 billion), and South Korea ($2.2 billion).

The Mekong Delta province of Long An was the largest recipient of FDI with $3.58 billion, followed by HCM City ($1.78 billion) and Bình Dương ($1.33 billion). — Vietnam News/Asia News Network

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