Disbursement of foreign direct investment (FDI) is expected to reach 10 billion USD by the end of this year, according to the Foreign Investment Agency (FIA) under the Ministry of Industry and Trade.

Do Nhat Hoang, FIA Head, attributed the result to efforts of the Government, ministries and branches to improve the investment environment and promote investment.

During the first half of this year, foreign investors have committed to pump approximately 6.4 billion USD into the country, down 27.3 percent over the same period last year.

Only 452 new foreign-invested projects, worth 4.76 billion USD, registered in the country, representing a fall of 25 percent in respect of both number of projects and level of capital, from the figures of the corresponding period of last year.

A total of 123 projects registered to increase their capital by a total of 1.62 billion USD, a year-on-year drop of 64.5 percent in capital and 50 percent in number of projects.

However, FDI disbursement reached about 5.4 billion USD, up nearly 2 percent against the same period last year.

Economists have blamed the slow recovery of the global economy, a wide range of difficulties in finance and competition facing investors and Vietnam ’s policy to tighten investment management and improve the quality of foreign-invested projects, for the contraction of FDI flow.

Hoang said the number of FDI projects is expected to continue dropping as Vietnam focuses on the quality of investment.

During the January-June period, the processing and manufacturing industries took the lead in FDI attraction, absorbing 63 percent of total registered capital. It was followed by real estate with 25 percent.

Japan remained Vietnam 's largest source of foreign investment, contributing 65 percent of the nation's total FDI.

The southern province of Binh Duong retained its position as the most favourite location for foreign investors, drawing about 1.79 billion USD or 38 percent of total FDI registered in the country over the period.-VNA