|Clothing is made by workers at the Japan-invested Toyotsu Vehitecs Viet Nam Company in the southern province of Binh Duong. Foreign direct investment inflow in Viet Nam is expected to sharply increase in the 2014-15 period. — VNA/VNS Photo Quach Lam
HA NOI (VNS)— Foreign direct investment (FDI) inflows in Viet Nam is expected to sharply increase in the 2014-15 period as the stable economy would create favourable conditions for the flow.
The National Financial Supervisory Committee (NFSC) last week released the latest forecasts for the economy in the 2014-15 period, showing that the FDI would see a high growth rate because of world economic improvement.
The World Bank earlier predicted that the world economy would have a growth rate of 3 per cent and 3.3 per cent in 2014 and 2015 respectively, much higher than 2.2 per cent this year.
In addition, the committee said FDI attractions would be higher as Trans-Pacific Partnership Agreement (TPP) would be signed in 2015.
It added that domestic private investment would also be improved because supporting policies will be brought into play in the next few years, while solutions to restructure the banking sector and resolve bad debts would upgrade the financial system.
Exports are forecast to continue at a high growth rate due to FDI projects, and would be momentum for the economy, the NFSC said.
However, the committee said the economy would be challenged by risks of public debt in Europe and decreasing growth in China and India.
Domestic enterprises would still face difficulties, especially in the agricultural sector. The State budget balance would be limited, causing capital shortage for development.
It also said Viet Nam's economy was expected to grow by 5.6-5.8 per cent and 6.0-6.2 per cent for 2014 and 2015, respectively.
The NFSC said total social investment capital would have to reach 30-31 per cent of GDP in 2014 and 2015; credit growth at 15 per cent and exports at 12-14 per cent in 2014 to jump to 13-15 per cent in 2015, to achieve the above mentioned GDP growth rate.
The committee also sees inflation of around 7 per cent in 2014 and to fall to 6.5 per cent in 2015. Its forecast for this year's GDP growth of 5.3 per cent.
It said the Government's policies should focus on improving demand and supply in the economy, enhancing productivity and effectiveness.
It was the reason that economic restructure acceleration played an important role to create new changes for the economy, it added.
The Government should also take solutions to gradually improve agriculture and rural areas while supporting local industry and businesses.
The outlook is given based on business and operation results in the first eight months of this year and forecasts about the global economic situation given by credit institutions worldwide.
Binh Duong attracts FDI
The southern province of Binh Duong attracted US$1.49 billion in FDI in the first eight months of 2013, surpassing its target of $1 billion for the year.
During the period, the province licensed 88 new FDI projects worth $648 million, bringing the total number of FDI projects to 2,174 with investment of more than $18.4 billion. Another $400 million was also added to 88 existing projects.
This year, Binh Duong province has seen more investment from large groups involved in real estate and services.
Outstanding projects include the Hoa Binh-Binh Duong VSIP Complex, with a total investment of $199 million, and the Japan-based Panasonic Eco Solutions $38 million electric equipment project in the VSIP industrial park.
To lure more foreign investment, the province promotes investment through consulates, trade offices and business communities while improving the quality of the workforce.
The province is also interested in attracting high-tech industries such as electronics, pharmaceuticals and precision mechanics. It also gives priority to developing support industries for garments, footwear and woodworking. — VNS