Vietnam Q1 FDI inflow jumps 13.6 pct y/y-newspaper

Published: 23 Mar 2010 19:36:49 PST

HANOI, March 24 - The flow of foreign direct investment (FDI) into Vietnam accelerated to an annual rate of 13.6 percent in the first quarter of this year, with around $2.5 billion disbursed to projects, a state-run newspaper said on Wednesday.

In March, an estimated at $1.4 billion was disbursed, doubling the amount of last month and pushing the pace of inflows forward after annual growth of 10 percent in the first two months of 2010, the Vietnam Economic Times newspaper reported on Wednesday.

New pledges of funds and increased capital in existing projects in the first quarter dropped 71 percent from a year earlier to a combined $2.14 billion, however, the newspaper quoted an FDI report as saying.

Foreign investment inflows and overseas remittances are key foreign exchange sources helping Vietnam offset its trade deficit, which the government has forecast to widen to $2.6 billion by the end of March. [ID:nSGE6210D2]

Vietnam's exports this year could face fierce competition from China as the neighbour looks to expand its export market share globally, said director Le Dinh An of the National Centre for Socio-Economic Information and Forecasts.

An was quoted by the Planning and Investment Ministry-run Dau Tu newspaper as saying a dollar shortage that has put pressure on the dong <VND=> would linger in Vietnam during the second quarter as the U.S. currency strengthens.

Vietnam has devalued the dong four times since the middle of 2008 to relieve pressure on the currency, with the latest devaluation in February.

Disbursement of FDI in Vietnam could rise 10 percent to between $10 billion and $11 billion this year, thanks to the global economic recovery, a government minister told state media in February. [ID:nHAN507141]