There appears to be a consensus that the Trans-Pacific Partnership (TPP) will bring strong inflows of foreign investment into Vietnam.
In its latest forecast about the TPP’s impacts on Vietnam, the Hanoi-based Vietnam Institute for Economic and Policy Research said the country will see the biggest increase in foreign direct investment (FDI) thanks to the agreement, compared to the other 10 member economies.
Nguyen Mai, chairman of the Vietnam Association of Foreign Investment Enterprises, said he strongly believes that FDI will surge, possibly with the strongest inflows into the sectors of manufacturing, textile, electronics, and software outsourcing.
Mai said of all the TPP participants, the US seems to be the most eager to boost its investment in the country, considering that many of its businesses have recently come here to learn about local business environment.
TPP in Vietnam
“US investors will definitely rise to the top in Vietnam,” he said.
With 761 projects registered with more than $11 billion by August 20, the US is currently the seventh largest investor, according to the latest figures by the Foreign Investment Agency under the Ministry of Planning and Investment.
On the other hand, Mai expected an “unremarkable” rise in FDI flows from Japan, which is now already the second biggest investor after South Korea, with nearly $38 billion pledged for 2,725 projects.
Vietnam and Japan signed an economic partnership agreement in 2010, but since then investment from Japan has fluctuated, which means the new TPP may or may not help, he said.
Vietnam: Manufacturing to remain the key driver of growth
We expect robust exports, led by strong global demand for electronics, to continue to underpin solid economic growth over the remainder of this year with GDP forecast to rise close to 8%.
GDP growth was unchanged at 4.5% y/y in Q1. Manufacturing activity surged, while the recovery in service sector activity and construction continued albeit at a more subdued pace as some localised social distancing measures were reinstated.(more…)
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