Foreign Investment Pledges to Vietnam Plummet by 42%

FDI decrease

Foreign investment pledges to Vietnam took a sharp downturn in May, plummeting by 42% to $1.8 billion compared to the previous month, according to official data released. This decline suggests potential challenges ahead for the investment-reliant Southeast Asian industrial hub.

While investment inflows, reflective of past decisions, saw a month-on-month increase in May, new commitments hit their lowest level of the year, excluding February. Data from the planning and investment ministry, as of May 20, revealed the extent of the decline in new investment pledges.

Despite the drop in May, foreign investors have pledged a total of $11.07 billion to Vietnam so far this year, marking a modest 2% increase compared to the first five months of 2023.

From January 1 to May 20, Vietnam recorded foreign investment inflows of $8.25 billion, reflecting a 7.8% rise from the same period a year earlier. Despite the overall increase in investment inflows, the significant decline in new pledges in May raises concerns about the sustainability of future investment growth in Vietnam.