Foreign direct investment (FDI) commitments to Hanoi in the year to May 19 increased 6.1% against the previous month to US$1.04 billion, Hanoi’s portal reported.

Data: Municipal Statistics Office. Chart: Nguyen Tung.

The growing trend of FDI to Hanoi showed result of the city authorities‘ efforts to reform administrative procedures and ensure a favorable investment environment.

From the start of this year, the capital city has approved 255 new projects worth US$327 million and allowed other 63 to pump an additional US$378 million in the five-month period. Foreign investors also contributed US$340 million in capital to other 468 projects.

The trade and services sector attracted the largest FDI amount during the period with US$411 million; followed by real estate and construction with US$378 million; and manufacturing and processing (US$192 million).

Among countries and territories having invested in Hanoi during the January – May period, Singapore took the lead with US$262.7 million. Japan claimed the second spot with US$230 million, followed by Taiwan (China) with US$185.5 million, and South Korea with US$106.9 million.

Covid-19 dampens consumer sentiment

As the city has effectively contained the Covid-19 pandemic, the majority of businesses and service activities have reopened, except for bars or karaoke parlors.

However, the pandemic’s negative impacts on the economy remain severe, which has significantly affected the people’s income, and subsequently consumer spending.

In May, Hanoi’s consumer price index (CPI) slightly declined 0.25% month-on-month.

Statistics revealed two out of 11 commodity groups, which are components of the basket for CPI calculation, witnessed monthly decreases in prices, with transportation posting the deepest fall of 2.18%, leading to a reduction of 0.2 percentage points to the overall growth; followed by food and catering services with 0.82%.

Total retail sales of consumer goods and services in Hanoi in the five-month period are estimated at VND212.8 trillion (US$9.11 billion), down 4.4% year-on-year.

Notably, revenue from catering and hospitality services suffered a decline of 36% year-on-year in revenue to VND16.1 trillion (US$689.94 million).