Key takeaways from webinar: Vietnam Foreign Investment Outlook 2023: Navigating headwinds ahead

Mr. Dong Le, Managing Director, Head of Market Research & Consulting Services of FiinGroup spoke at the Webinar.

On March 7^th, 2023, FiinGroup and Nikkei scoutAsia successfully organized the Webinar” Vietnam Foreign Investment Outlook 2023: Navigating headwinds ahead” with the participation of nearly 400 attendees from corporates, financial institutions, consulting firms, investment funds, trade, and investment promotion agencies in Japan, Korea, Singapore, Thailand, Europe, and the US.

Mr. Dong Le, Managing Director, Head of Market Research and Consulting Services of FiinGroup, joined the Webinar as a speaker together with Mr. Nguyen Xuan Thanh, Senior Lecturer in Public Policy at Fulbright University Vietnam.

This Webinar provided foreign businesses with the most updated information and in-depth insights on the current situation of Vietnam’s macroeconomics, challenges faced by corporates in the area, and reactions/support from the Vietnamese Government to overcome the obstacles and long-term economic prospects, highlights on opportunities in some promising sectors for foreign investors in the years to come.

Below are the key takeaways from the Webinar:

1. GDP is expected to grow at 6.3%-6.5% in 2023

• Vietnam’s economic growth is estimated to slow down in 2023, after a robust post-Covid economic recovery in 2022. Softer global demand weight on Vietnam’s exports and manufacturing sector. Investment disbursement by FDI and local corporates might also be slower mainly due to the weak global and local economic outlook.
• Domestic consumption and the Government’s infrastructure spending are expected to be key factors to support economic growth in 2023.

2. Inflation is forecasted to grow up to 4.5% in 2023 from 3.15% in 2022.

This is mainly due to some upward pressures on commodity prices resulting from China’s reopening, supply chain disruption because of prolonged geopolitical tensions, the possible raising of the prices of some State-controlled utility services (e.g electricity, medical, etc.,). However, it would well remain under the Government’s control.

3. In the short-run, foreign investment flows to Vietnam might be clouded by global macroeconomic volatility (i.e recession fears in major markets, tightening monetary policy, geopolitical tensions including the Russian and Ukraine conflict, and supply chain disruptions) as well as Vietnam’s domestic challenges (i.e liquidity crunch due to wrongdoings in the corporate bond market and banking system, weak domestic demands, etc.,)

4. Over the longer term, Vietnam would remain a stable and rapid growth destination for international businesses and foreign investors thanks to a stable social and political system, a growing local consumer market, an ample workforce of young and skillful laborers, a strong export orientation, and global integration commitments via 15 FTAs Vietnam joined in recent years. Therefore, foreign investment activity is expected to recover in the 2^nd half of 2023 and the following years.

5. Current local challenges and market volatility in Vietnam present strategic M&A opportunities for well-prepared foreign players to penetrate the market and expand/grow their businesses here, contributing to their long-term success thanks to more attractive valuations, lessened competition for deals, and new/distressed assets coming to market.

6. Some promising sectors for both FDI and M&A investments in Vietnam going forward include ​

• Manufacturing (i.e Electronic and Auto Parts, Packaging, Consumer Goods, etc.,)
• Logistics (i.e Port Operation, Warehousing, etc.,)
• Technology (i.e Fintech, Edtech, Medtech, Digital Transformation, etc.,)
• Financial Services (i.e Banking, Consumer Finance, Insurance etc.,)
• Utility and Environmental (i.e Renewable Energy, Water supply, Waste Treatment, Recycling, etc.,) 
• Healthcare and Education Services
• Industrial Real Estate

Kindly refer to the detailed presentation handout HERE.

Revisit the full webinar HERE