Impressive start for Vietnamese FDI in 2019

Foreign investment into Vietnam during the first quarter of 2019 achieved the highest first quarter figures since 2016, according to the country’s Foreign Investment Agency.

Foreign investors had poured $10.8bn into Vietnam as of the end of March, the majority of which went into processing and manufacturing, said the agency.

These excellent first quarter results follow another stellar year for Vietnamese FDI in 2018. For the sixth year in a row, the country saw increased year-on-year growth in FDI projects last year, with 26.5% growth through 277 projects, according to investment monitor fDi Markets.

“The primary reason that Vietnam is attractive for FDI is that the labour cost is low, about $3500 to $4000 per annum for an average factory worker, compared with about $10,000 per annum in China,” said Andy Ho, CIO of VinaCapital Vietnam Opportunity Fund, an investment fund listed on the London Stock Exchange.

“[Moreover], Vietnam has 3000 km of coastal land from which to export goods, and logistically, it’s well positioned in the centre of south-east Asia. The third component is the stability of the economy over the past five years. The local currency against the US dollar has been very stable. Inflation is very low, around 3%, and interest rates are very low.”