FDI to remain strong in 2023: forecast

Foreign investments are expected to flow into the tech and property sectors this year despite concerns about a global economic slowdown.

They tripled year-on-year to US$1.2 billion in January, with the number of projects surging by 48.5% to 153, according to the Ministry of Planning and Investment.

The investment in Vietnam’s tech sector is a positive considering the short-term decline in the global tech industry, according to lender HSBC.

Chinese display manufacturer BOE is reportedly planning to invest $400 million to build two factories in Vietnam, while Apple plans to start making MacBooks in the country this year.

Some property market insiders expect a boost in foreign investment.

Last year property ranked second in FDI at $4.45 billion, or 16.1% of the total investment.

Starting in mid-2023, when interest rates are likely to stabilize, investment is expected to pour into Asian property, especially Vietnam, which is considered a safe country to invest amid global uncertainty.

“There is still a large amount of capital waiting to be pumped into the property market,” David Jackson, CEO of property consultancy Colliers International Vietnam, said.

“Office, industrial and logistics are set to attract the most interests in Vietnam this year.”

Residential and tourism property are also expected to benefit.

But global recession and tightened spending remain obstacles.

“We believe the situation will improve in the second half of the year and become favorable for FDI,” ACB Securities said in a note.

Foreign portfolio investment has been robust, with exchange-traded funds investing more than VND3 trillion for a fourth month in a row in January.

On the stock markets, foreign investors’ net buying was worth VND4.2 trillion last month.

But SSI Securities warned that the reopening of China means investors could take their money there, weakening inflows into neighboring markets.