Vietnam has seen strong economic momentum with FDI commitments - an indicator of future capital disbursements - reaching $18.39 billion, according to Trading Economics. In the first five months of the year, manufacturing and processing industries attracted the most foreign investment with more than $10 billion, followed by real estate with nearly $5 billion.

Professor David Dapice, Southeast Asia Development Economist, Tufts University, USA, commented that these are impressive numbers for any economy in the context of recent trade tensions between global trading partners and that reflects  investors' confidence  that Vietnam will reach a more reasonable tariff agreement. Professor David said that "Vietnam is on the right track and making good use of what can be controlled. In addition, the weakening of the USD stemming from US fiscal policy and concerns in the bond market are also pushing capital flows away from US assets. From there, the strength of the Vietnamese Dong can be improved accordingly."

Among the commitments to disburse investment capital, the processing and manufacturing sector is attracting new investments. Singapore's Business Times newspaper commented that Vietnam's industrial production remained stable, with a 9.4% year-on-year increase in May, marking the fourth consecutive month of growth. However, soft data showed that factory production was shrinking. The Vietnam Purchasing Managers' Index (PMI) released by S&P Global Risk Research in May recorded a second consecutive month below the 50 threshold, reflecting a slowdown due to a decline in new orders, amid weakening foreign demand related to tariff uncertainties from the US.

The Vietnam Investment Climate Report published by UK-based consultancy Knight Frank assessed that Vietnam holds a prominent role in global markets thanks to its diverse export products. Vietnam is currently the leading destination in Southeast Asia for manufacturers, with positive labor productivity growth in recent times. Mr. Ben Gray, Director of Capital Markets at Knight Frank Vietnam, said that the trend of continuing to allocate capital to Vietnam by existing funds and investors may continue in June. "I think that FDI disbursement this year will remain high despite concerns about tariffs from the US. It is necessary to recognize that 30% of goods from Vietnam are exported to the US, this is a large number. However, there is a real need for businesses to restructure the supply chain in the region, and 70% of Vietnam's exports will still go to other potential markets. Therefore, I assess that the demand for FDI disbursement in Vietnam this year will remain high," Mr. Ben Gray further analyzed.

However, in the context of global trade remaining unpredictable, experts recommend appropriate policies to help Vietnam consolidate its position as an attractive investment destination in the eyes of foreign investors.

(Source: VTVOnline)

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