HANOI: Vietnam expects disbursed foreign direct investment (FDI) to reach a record high this year after the government eased business regulations, luring investors seeking to benefit from the Trans-Pacific Partnership (TPP) trade pact.
Disbursed FDI in 2015 should be about US$14 billion, $1.5 billion more than last year, Planning and Investment Minister Bui Quang Vinh said. Pledged FDI is forecast to increase over last year's $21.9 billion.
"Our improving investment environment and trade agreements help attract more companies to move from China and other regional countries to Vietnam," Mr Vinh said.
The surge in the Southeast Asian country's foreign investment comes as neighbouring countries such as the Philippines report declines, reflecting overseas investors' increasing attraction to Vietnam.
The country stands to be the biggest winner of the 12-nation TPP accord, which will boost exports with tariff reductions on a range of products, including shoes, seafood and clothes, according to the World Bank.
"Sticky capital inflows through FDI are very important for Vietnam as it tries to import more goods to industrialise," said Trinh Nguyen, a Hong-Kong based senior economist for emerging Asia at Natixis. "This is a much more stable way to access funding for investment, which Vietnam needs at this level of development."
Vietnam is forecast to post the strongest economic growth this year of six major Southeast Asian countries, according to the Asian Development Bank. The country's growth is expected to accelerate through the second half, underpinned by rising private consumption, export-oriented manufacturing and FDI, the ADB said.
The TPP could boost Vietnam's gross domestic product by about 8% and boost exports by 17% over the next 20 years, the World Bank said.