Vietnam received an estimated record $9.65 billion in actual foreign direct investment (FDI) so far this year, with strong inflows going to the manufacturing sector, a key driver for the country’s economic growth.
FDI inflows rose 8.4 percent from a year ago, a Planning and Investment Ministry report said on Friday, the highest level since late 1987 when a law was implemented to allow FDI to enter the Southeast Asian country.
FDI is an important source of foreign exchange for Vietnam, helping to boost its capital account and offset a trade deficit that had widened to an estimated $3.9 billion so far in 2015.
New FDI pledges in the January-September period rose 44.5 percent from a year ago to $11.03 billion, the ministry’s report said, citing major projects such as the $2.4 billion Duyen Hai 2 thermal power plant.
Vietnam has embarked on liberal reforms to strengthen capital markets and position itself as a low-cost manufacturing alternative to China, especially for cell phones, televisions, footwear and garments.
New FDI commitments in manufacturing account for 70 percent of the total $84.8 billion attracted by Vietnam between 2011 and August 2015, the Asian Development Bank said on Tuesday.
It raised Vietnam’s GDP growth forecast this year to 6.5 percent from 6.1 percent earlier, citing rising private consumption, export-oriented manufacturing and FDI.
Foreign firms expanding in Vietnam include Samsung , LG, Microsoft and Intel .
An additional $3 billion placed by Samsung Display, a subsidiary of the world’s top smartphone maker Samsung Electronics Co Ltd, has helped boost the FDI inflow, the report said.
Samsung Display plans to put another $3 billion into Vietnam by 2020.
Vietnam has projected drawing $23 billion in FDI pledges in 2015, up nearly 40 percent from last year, while actual inflows are expected to be on par with 2014 at $12.5 billion, the report said, citing Planning and Investment Minister Bui Quang Vinh.
Over the next five years, Vietnam aims to lift its growth rate to an annual average of 6.5-7.0 percent by capitalising on multilateral trade deals, modernising agriculture and boosting investments, its communist party has said.