HANOI, April 11 (Reuters) - Foreign managers expect no
major changes in investment in Vietnam this quarter, after
inflows fell in the first three months of the year, according to
a survey published on Tuesday by the European Chamber of
Commerce in Vietnam.
The quarterly business climate index confirmed that the
Southeast Asian manufacturing powerhouse remained a top
destination for foreign corporate investment, but lower global
demand and uncertainty over the political and regulatory
domestic situation led most managers to remain cautious.
The survey, which focuses on European companies and
individuals operating in Vietnam, showed that 58% of the more
than 200 surveyed managers did not plan to change their
investment plans in Vietnam this quarter.
Vietnam received $4.3 billion in foreign direct investment
(FDI) in the first quarter, down 2.2% from a year earlier,
according to the latest government data released in late March.
The Netherlands, France, Luxembourg and Germany are the EU's
top investors in Vietnam, according to official data, with
combined invested capital exceeding $20 billion. This is still a
fraction of the investment from countries like South Korea and
Japan - although FDI is often is channelled through Singapore
and other financial hubs.
A majority of managers said Vietnam should increase
political stability and improve its regulatory environment to
attract more FDI. The country has seen major recent political
reshuffles, including the dismissal of the president and other
senior officials as part of a broad anti-graft campaign
spearheaded by the ruling Communist party.
Meanwhile, 55% of managers said they did not expect to hire
more people this quarter, and 16% forecast job cuts. Roughly one
in four remained sanguine about their headcount planning.
Vietnam's gross domestic product grew 3.32% in the first
quarter, down from 5.92% in the fourth quarter of 2022, amid
slower exports due to weakening global demand.
Thousands of jobs have been cut this year in Vietnam's
footwear and garment industry which is one of the world's top
production hubs for giants such Germany's Adidas and
Nike .
(Reporting by Francesco Guarascio @fraguarascio
Editing by Ed Davies)
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