TS Nguyen Minh Phong said that with the current
developments, if the trend of exchange rate stability is prolonged, the
resistance to attract FDI inflows into Vietnam will grow.
In the first half of 2018, Vietnam has about 17,500 valid
FDI projects with a total registered capital of 331.2 billion USD. The
accumulated disbursement capital is about 180.7 billion USD.
As a percentage of GDP or per capita, FDI into Vietnam has
surpassed China, India and most ASEAN countries. However, this capital flow may
be affected by the US-China trade war, according to TS. Nguyen Minh Phong,
recently published in the press.
Like most experts' opinion, Mr. Phong said that the war
between the two largest and second largest economies is difficult to predict.
On both sides, Mr. Phong analyzed, in a state of fighting
and negotiating, taking his national interests as the ultimate goal. The war is
unclear but the consequences are very diverse, multidimensional and gradually
affecting global supply chains, including Vietnam.
Commenting deeply on the impact on the currency, Mr. Phong
said that the pressure to increase US dollar interest rates and the
depreciation of the Chinese Yuan would join forces to increase the pressure on
the VND exchange rate.
The pressure of devaluation of VND (increase of exchange
rate for USD) will increase in the same direction with the increase of trade
deficit and scarcity of foreign currencies, as well as the scale of USD reverse
flow to the border before the attraction of interest rate difference. USD
mobilization in Vietnam is currently at 0% and there is no sign of increase,
with the US from 1.75-2% and will continue to increase slowly.
According to him, if the trend of stabilizing the exchange
rate is prolonged, ie increasing the nominal value of VND, the disadvantage of
exporting Vietnamese goods will be stronger and the resistance of attracting
FDI inflows into Vietnam will also grow. up. This means the possibility of
narrowing the production and exports of the foreign direct investment sector,
due to exchange rate losses when investing in Vietnam.
On the other hand, if it is forced to raise the exchange
rate, or devalue the VND, to increase FDI attraction, domestic inflation
pressure will be the biggest challenge of the second half of 2018, in the
context of pushing up cost inflation. and domestic monetary inflation remained
the same, even continued to increase with the process of accelerating financial
autonomy and marketing a large community of public non-business units in the
planned route.
Therefore, this war, if prolonged, Mr. Phong said that it is
possible to make reversals or reverse the inflows of FDI in the region and the
world in the direction of avoiding markets that are subject to high tax rates
and focusing on countries are less likely to impose taxes - more protection.
Therefore, Mr. Phong said that on the one hand, it is
necessary to stick to the movement of the trade war, on the one hand, continue
to improve the business environment, improve competitiveness, carefully prepare
the situation scenarios, increase the ability to respond. flexible policy
response and market response, flexible response solutions needed to limit the
negative impact of the US-China trade war, maintaining momentum for Vietnam's
economic development from the business sector. FDI.
FDI picture for the first 6 months of 2018
Source:
Economic life