General Statistics Office Paints Positive Picture
The General Statistics Office of Vietnam (“GSO”) has this month released a set of strong economic figures pointing to a positive second half of 2024.
Foreign Direct Investment Increases
First, Vietnam saw a 13-per cent annual increase in foreign direct investment (“FDI”) in the first half of 2024, worth over USD 15 billion, according to the GSO. New FDI projects represented around two-thirds of this investment (USD 9.5 billion) with over 1,500 new projects registered in the last six months – a 46 per cent rise in capital and an 18 per cent increase in the number of new projects.
Meanwhile, around one-third (USD 3.9 billion) of the FDI was capital adjustment for almost 600 on-going projects. This represented a slight fall (around 6 per cent) in the number of projects but a significant rise (about 35 per cent) in capital. There was also an 8 per cent increase in FDI disbursement compared to the same period in 2023, with over USD 10 billion distributed in the six months to 31 June.
Processing and manufacturing have long been among the most popular sectors for foreign investors. This remained the case in the first half of 2024, with the sectors swallowing over two-thirds (70 per cent or USD 10.6 billion) of total FDI in this period. Real estate came a distant second, with a little less than USD 2.5 billion.
The GSO also highlighted the cities and provinces which attracted the most foreign capital. Bac Ninh province – covering over 800 km2 to the north and east of Hanoi with 15 industrial parks and over 1,700 FDI projects in sectors like manufacturing, electronics, and IT – led the field with over USD 2.5 billion. The southern coastal province of Ba Ria-Vung Tau attracted over USD 1.5 billion, while the northeastern province of Quang Ninh brought in USD 1.36 billion.
Hanoi and HCMC Record Positive Growth
Hanoi posted positive economic growth of 6 per cent in the first half of 2024, according to the capital’s statistics office. This surpassed the 5.86 per cent recorded over the same period in 2023. Underpinning this trend was a 5 per cent rise in the Index of Industrial Production (“IIP”), with processing and manufacturing and consumption contributing to growth. The capital also saw strong growth in the export turnover of goods (up 11 per cent). However, while 15,500 new businesses were registered, this represented a small (3 per cent) decline compared to the same period in 2023.
Meanwhile, southern metropolis HCMC saw even stronger growth in the first six months of 2024, recording almost 6.5 per cent growth. This represented a significant increase on the 4 per cent growth seen in the same period of 2023, according to the HCMC statistics office. Unlike in Hanoi, services made the greatest contribution to growth here, with a 7.26 per cent annual increase. HCMC also recorded a greater number of new business registrations, with over 25,000 new companies opening their doors in the last two quarters.
Inflation Rising (but Under Control)
However, despite positive trends in foreign investment, domestic consumer prices continue to rise. Consumer staples including the prices of household electricity (up 9.45 per cent), education (up 8.58 per cent), and healthcare (up 7.07 per cent) have driven a 4.08 per cent rise in the Consumer Price Index (“CPI”), according to the GSO.
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