April 11, 2023
A street of old quarters area is seen in Hanoi, Vietnam June 21, 2019. REUTERS/Kham
HANOI, April 11 (Reuters) - Foreign managers expect no major
changes in investment in Vietnam this quarter, after inflows fell in the first
three months of the year, according to a survey published on Tuesday by the
European Chamber of Commerce in Vietnam.
The quarterly business climate
index confirmed that the Southeast Asian manufacturing powerhouse remained a
top destination for foreign corporate investment, but lower global demand and
uncertainty over the political and regulatory domestic situation led most
managers to remain cautious.
The survey, which
focuses on European companies and individuals operating in Vietnam, showed that
58% of the more than 200 surveyed managers did not plan to change their
investment plans in Vietnam this quarter.
Vietnam received $4.3
billion in foreign direct investment (FDI) in the first quarter, down 2.2% from
a year earlier, according to the latest government data released in late March.
The Netherlands,
France, Luxembourg and Germany are the EU's top investors in Vietnam, according
to official data, with combined invested capital exceeding $20 billion. This is
still a fraction of the investment from countries like South Korea and Japan -
although FDI is often is channelled through Singapore and other financial hubs.
A majority of managers
said Vietnam should increase political stability and improve its regulatory
environment to attract more FDI. The country has seen major recent political reshuffles,
including the dismissal of the president and other senior officials as part of
a broad anti-graft campaign spearheaded by the ruling Communist party.
Meanwhile, 55% of
managers said they did not expect to hire more people this quarter, and 16%
forecast job cuts. Roughly one in four remained sanguine about their headcount
planning.
Vietnam's gross
domestic product grew 3.32% in the first quarter, down from 5.92% in the fourth
quarter of 2022, amid slower exports due to weakening global demand.
Thousands of jobs have
been cut this year in
Vietnam's footwear and garment industry which is one of the world's top
production hubs for giants such Germany's Adidas (ADSGn.DE) and
Nike (NKE.N).
Reporting by Francesco
Guarascio @fraguarascio Editing by Ed Davies
https://www.reuters.com/markets/asia/foreign-executives-cautious-over-vietnam-investment-eu-business-body-2023-04-11/
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