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Foreign investor confidence returns
Foreign investors have regained confidence in Vietnam’s economy given the country’s achievements in macro-economic stabilization. In a research report released last week, Standard Chartered Bank highlights some signs that the economic slowdown is bottoming out. The bank noted an improvement in gross domestic product growth in the third quarter, which is put at 5.54%, up from the 4.9% achieved in the first half of the year. Inflation has slid to 6% per year after surging to 20% in 2011. Export performance returned to a double-digit growth rate in January – October while the Government’s efforts to cope with bad debt in the banking system and restructure the economy have begun paying off. According to the report, the economic recovery is buoyed by foreign direct investment. Foreign investors are still interested in the local economy despite economic restructuring challenges. A private equity report issued last week by Grant Thornton Vietnam also shows that foreign investors have regained confidence in Vietnam. As much as 43% of respondents in a survey had a positive outlook for Vietnam’s economy in the next 12 months, the highest in two years, while the respondents with a negative outlook on the economy decreased significantly to 13%. Grant Thornton Vietnam said this indicates confidence is getting its way back to the private equity investors. As a result, 46% of the respondents said that they will increase their investment allocation to Vietnam whereas 44% of them will keep their proportions stable. The report is the 10th bi-annual report that Grant Thornton Vietnam has released, which looks at investment sentiment and outlook for the private equity sector in the nation. Its results are based upon survey responses provided by decision-makers working in the private equity sector. In a report sent to the Government recently, the National Financial Supervisory Commission also highlighted the upsurge of foreign direct investment (FDI) to manifest the business community’s confidence in the local economy. The registered FDI in the January-October soared 65.5% year on year to over US$19.2 billion, with fresh funds rising 79% to over US$13 billion and additional capital injected into operational projects leaping 42.5% to US$6.1 billion. To keep the strong momentum, the financial watchdog proposed the Government stay steadfast in maintaining macro stability so as to further improve the business environment and consolidate investors’ confidence.
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