By Quoc Hung - The Saigon Times Daily
HCMC – The inflow of foreign direct investment (FDI) into the country crashed to a mere US$508 million in July compared to the monthly average US$1.3 billion in the first half, marking a clear downtrend in FDI attraction.
The downtrend has been clearer in recent months, dropping from US$1.5 billion in May to the US$800 million in June and just slightly over half a billion dollars this month, according to a report from the Ministry of Planning and Investment.
Last month, of the total 95 projects freshly licensed, there were no new capital-intensive FDI projects worth hundreds of millions of dollars each like in previous months of this year, according to the report released by the ministry’s Foreign Investment Agency.
Last month also saw 16 operational projects increasing capital by a combined US$190 million, taking the total amount of newly-injected funds in operational projects to US$715 million so far this year.
Despite the slump in July, the total number of FDI projects in the year to date still hit 533 with total pledged capital of more than US$8.41 billion, a fall of 16% in the number of project but still an increase of 5.4% in capital year on year.
However, according to the agency, the total investment in the country so far this year, inclusive of additional funds into operational projects, was only US$9.13 billion, equivalent to 68.2% of that in the same period last year.
The Foreign Investment Agency predicts Vietnam to receive US$22-25 billion in newly registered and additional FDI capital this year, an increase of 5-10% from 2009, owing to the recovery of the global economy.
New FDI approvals in 2009 plunged as much as 70% from the previous year due mainly to the global economic crisis.
According to the agency, FDI disbursements in Vietnam totaled about US$1 billion last month, taking the January-July figure to US$6.4 billion, up 1.6% from the same period last year.
Given the average monthly disbursement of around US$900 million, it is predicted that FDI disbursement will reach US$11 billion this year, slightly higher than last year’s figure of US$10 billion.
In the past seven months, foreign invested enterprises have benefited from the regional recovery, as seen in their trade values. Exports in seven months surged 26.7% over the same period to some US$20.6 billion. If crude oil export is excluded, this value still reached US$17.67 billion, up 40.1% year on year.
Meanwhile, the FDI sector also spent US$19.5 billion on imports in the seven months, up 46.4% over the year-ago period.