Home Business Why FDI has been a key driver of Vietnam’s economic growth

Why FDI has been a key driver of Vietnam’s economic growth

by Inside Out

Vietnam received $2.5 billion in foreign direct investments (FDI) in January-February, up 5% from the same period a year earlier, the Ministry of Planning and Investment said on Wednesday.

FDI has been a key driver of Vietnam’s economic growth. Companies with FDI account for around 70% of the Southeast Asian country’s exports, Reuters reported.

“Because Vietnam has many advantages to attract FDI such as abundant human resources, potential markets, stable politics, and abundant and diversified natural resources, the FDI sector has developed very rapidly, contributing more and more to the economic development of Vietnam”, Sophie Dao, Partner of Global Business Services in Vietnam told reporter.

FDI pledges – which indicate the size of future FDI disbursements – reached $5.46 billion, down 15.6% against a year earlier, the ministry said in a statement.

Of the pledges, 55.7% would go to manufacturing and processing while 26.5% are to be invested in electricity distribution, it added.

Japan was the top source of FDI pledges in the period, followed by Singapore and South Korea, according to Reuters.

 

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