Ben Tre City in the southern province of Ben Tre which lured the largest amount of FDI in the first two months of this year. — Photo nguyenkimtravel.com
The inflow of foreign direct investment (FDI) to Viet Nam saw a strong decline of 24 per cent year-on-year to nearly US$6.47 billion in the first two months of this year, according to the Foreign Investment Agency.
The two month’s FDI capital equalled only 53.4 per cent of the same period last year, excluding the Singapore-financed $4 billion Bac Lieu liquefied natural gas (LNG)-fired thermal power plant, which received an investment licence in January, the agency said in a monthly report released on Tuesday.
The unsatisfactory figures were attributable to the Lunar New Year holiday and the Covid-19 epidemic that have affected the travel of foreign investors as well as their decisions in developing new investment projects and expanding existing ones in Viet Nam, it said.
During the January-February period, FDI disbursement also decreased by 5 per cent year-on-year at an estimated $2.45 billion.
According to the report, 60 per cent of this capital, or $3.89 billion, was directed into electricity production and distribution; 27.3 per cent, or $1.76 billion, went into manufacturing and processing while retail and wholesale and science and technology absorbed $195 million and $180 million, respectively.
Among the 125 countries and territories investing in Viet Nam during the two months, Singapore was Viet Nam’s largest foreign investor with $4.12 billion, accounting for 64 per cent of the country’s total FDI. Mainland China came next with $720 million, making up 11 per cent of the total. South Korea ranked third with $425 million or 7 per cent, followed by Hong Kong, Taiwan and Japan.
With the presence of the large-scale LNG-fired thermal power plant, the southern province of Bac Lieu surpassed other localities to become the most attractive investment destination for foreign investors. The province alone accounted for 62 per cent of the total FDI registered in the country in the January-February period.
The southern province of Tay Ninh ranked second with $490 million, or 7.5 per cent of the total FDI. It was followed by HCM City with $481 million, or 7.4 per cent.
In the first two months, the foreign-invested sector earned $25.51 billion from exports, including crude oil, a modest rise of 1 per cent compared to last year’s corresponding period. Excluding crude oil, the sector’s export revenue stood at $25.06 billion, a yearly hike of 0.5 per cent. This is the sector’s lowest growth seen in the past five months.
During the months, the sector spent nearly $21.75 billion on imports, up 2.2 per cent year-on-year and making up 59 per cent of the country’s total spending on imports.
As a result, the sector enjoyed a trade surplus of more than $3.31 billion, compensating for a deficit of $3.6 billion recorded in the domestic sector.
As of February 20, the country had 31,344 valid foreign-invested projects with capital totaling more than $369.2 billion and nearly 60 per cent of the capital has been disbursed, according to the report.
South Korea remained Viet Nam’s leading source of FDI with $68.4 billion or 18.5 per cent of the total. Japan came next with $59.6 billion or 16 per cent, followed by Singapore, Taiwan and Hong Kong. — VNS