Competitive position consolidated

Competitive position consolidated

Foreign investment disbursement continues to show strong resilience, underscoring investors’ confidence in Vietnam’s economic prospects.

According to the latest data by the Foreign Investment Agency under the Ministry of Finance, foreign direct investment (FDI) disbursement increased by 8.8 per cent on-year to $15.4 billion in the first eight months of the year. This represents a 5-year high in such disbursement for the January–August period.

Specifically, manufacturing recorded a disbursement figure of $12.57 billion, accounting for 81.6 per cent of the country’s total FDI disbursement. This was followed by real estate with $1.24 billion, making up 8 per cent. The production and distribution of electricity, gas, water, and air conditioning amounted to $563.6 million.

Brian Lee, an economist at Maybank Investment Banking Group, said the steady climb shows that investors remain confident in Vietnam’s appeal, even amid elevated global uncertainty.

“Manufacturing is benefiting from the increased impetus for supply chain resilience with the US’ expanded trade war and heavy tariffs on China. Reciprocal tariffs on Vietnam remain in line with other ASEAN countries and lower than China and India,” Lee said.

Amidst this context, Apple, for instance, plans to assemble most of its non-iPhone products in Vietnam, instead of China.

“Real estate FDI is rising strongly because of strong long-term housing demand. A young and growing middle-class population is driving demand for housing upgrades. At 40 per cent, the urbanisation rate still lags behind peers in the region, and is steadily rising,” Lee added.

Additionally, strong manufacturing funding drives demand for industrial space. “Infrastructure investment is unlocking new areas for development. Regulatory reforms like the land law have also played a part in improving transparency for foreign investors,” he said.

Jola Pasku, senior economist at S&P Global, noted that the continued robust increase in pledged FDI in 2025 suggests positive investor sentiment and rising confidence that bets made via long-term investments in Vietnam would prove profitable.

“This robust performance in the context of heightened global trade tensions clearly demonstrates Vietnam’s consolidated manufacturing competitive position both within Asia and globally,” Pasku said.

More specifically, the significant share of FDI targeting the manufacturing and processing industries reflects the growing importance of the manufacturing sector from an economic growth/productive capacity.

“The evidence of the uptrend is, not surprisingly, also evident in high-frequency indicators such as industrial production and exports, which remain quite upbeat, and are bucking softness elsewhere in the region,” Pasku added.

According to a report released by the World Bank last week, FDI disbursement reached $26.2 billion (5.5 per cent of GDP) in the 12 months to June 2025, representing 9.3 per cent growth on-year. FDI commitments also registered a 23.8 per cent increase on-year by June, mostly directed to manufacturing (51 per cent) and real estate (22 per cent).

FDI commitments for newly registered capital moderated in the first half of 2025 at $9.3 billion (-3 per cent on-year) after two years of increased commitments. However, newly registered capital from China surged during the first six months, rising by 28.9 per cent on-year and representing 30 per cent of all FDI commitments, as supply chains continued to diversify.

VIR