High export earnings and strong financial capabilities have kept foreign-invested enterprises almost immune from severe impacts of an economic slowdown.
The Ministry of Planning and Investment (MPI) reported the economy grew just 4.38 per cent on-year in 2012’s first half and started to show deflation signs with consumer price index decreased 0.26 per cent monthly in June compared to a 0.18 per cent rise in May, 0.05 per cent in April, 0.16 per cent in March, 1.37 per cent in February and 1 per cent in January.
But MPI Minister Bui Quang Vinh told VIR last week that the situation “only badly affect Vietnamese-owned enterprises, not foreign-invested enterprises (FIEs)”. He said FIEs’ good export performance had paid off. According to MPI statistics, Vietnam’s total export turnover rose 22 per cent on-year in the year’s first six months to $53.1 billion, with FIEs contributing over $28.8 billion, excluding crude oil, up 41.5 per cent on-year.
In the first two quarters of 2012, FIEs saw a trade surplus of $4.66 billion. Vinh also noted that FIEs’ independence of local credit sources had helped them escape from local economic difficulties.
Despite an unfavourable economic conditions, foreign investors still poured more money into Vietnam, with disbursement grewo 1.9 per cent on-year in 2012’s first half to $5.4 billion.
Several provinces have also reported higher committed foreign direct investment (FDI). Dong Nai People’s Committee last week reported that newly committed FDI in the province grew roughly 90 per cent on-year in the first two quarters.
Quang Ninh province also reported its FDI attraction plan for the year had been fulfilled in the first six months with $390.9 million licensed, 15 times higher than in 2011. Vinh said FIEs were expected “to perform even better until the year’s end”.
Ford Vietnam last week announced its sales in June increased nearly two times from May to 437 units, helping the company an overall market share of 6.7 per cent.. Cargill Vietnam said its business revenue grew 8 per cent and this rate was expected to be 20 per cent for 2012.