Vietnam suffers big first-half greenfield FDI slump in 2019

In the first half of 2019, Vietnam attracted 83 greenfield FDI projects, the lowest number in the first half of a year since 2013, according to greenfield investment monitor fDi Markets. This marked a 50.6% decrease from the record 168 greenfield projects attracted in the first half of 2018.

This fall in greenfield investment activity is counter to the broader headline figures released by Vietnam’s Ministry of Planning and Investment, however, which highlighted an almost 8% rise in FDI projects in the first half of 2019. 

When extended to the 12-month period to June 2019, the number of greenfield FDI projects into Vietnam fell by 34.25% to 192 greenfield FDI projects, according to fDi Markets. Simultaneously, the country attracted 34.83% fewer inbound greenfield investments.

This is the largest fall in Vietnam since 2010 in the volume of greenfield FDI projects in the 12 months to the end of June, when there was a 37.54% fall in total greenfield FDI projects from a high of 309.

Although this half-year fall is partly explained by a high in the 12 months from July 2017 to June 2018, Vietnam performed far worse than the overall Asia-Pacific region, which recorded a fall in greenfield FDI projects and capital expenditure of 15.94% and 9.38%, respectively, during this time.

Vietnam has been one of the main benefactors of investment diversion away from China as a result of the US trade war, yet greenfield investment appears to be stalling in recent months.