About 91% of German companies are planning to expand their investment in Vietnam, according to a survey conducted by the Delegation of German Industry and Commerce (AHK) in Vietnam.

The AHK World Business Outlook Spring 2023 – Vietnam Focus shows that 40% of the surveyed firms also have plans to increase their workforce in the next 12 months.

Despite challenges such as inflation, uncertainties of the world economy, and the increasing political influence on supply chains, Vietnam is expected to experience a resurgence in its economic growth in the medium-term.

The growth will be fueled by various factors, including Free Trade Agreements (FTAs), the China Plus One strategy, the global trend of shifting and diversifying manufacturing supply chains towards competitive hubs in Southeast Asia, and the inflow of green investments, the report said.

About 500 German companies have invested some 2.9 billion USD in the Southeast Asian nation so far, mainly in its southern and northern regions that make up 60% and 22% of the total capital, respectively. They have generated about 50,000 jobs, thus significantly contributing to the bilateral ties.

As of July 20, newly-registered capital, additional investment, capital contribution and share purchase by German investors in Vietnam amounted to nearly 197 million USD, with 21 new projects, mainly in the construction and building material sector.

To lure more foreign investors, the AHK suggested the Vietnamese Government further streamline administrative procedures and invest more in infrastructure development, particularly in transport and logistics.

Furthermore, enhancing the competitiveness of domestic enterprises, spurring the development of industrial clusters, providing intensive personnel training, observing international standards, and ensuring stable electricity supply for sustainable development are crucial solutions to raise Vietnam’s attractiveness, it said.

VNA