“Despite the slow pace of growth, we expect confidence and sentiment – the two main culprits of 2015’s retreat in emerging markets – to improve. China’s slowdown and Fed rate-hike expectations should become less of a concern as we move into 2016,” the bank’s chief economist, Marios Maratheftis said.

“We believe Vietnam is an attractive destination for investment, a view echoed by our clients, and expect strong foreign direct investment (FDI) inflows in 2016 as well,” Nirukt Sapru, chief executive officer of Standard Chartered Bank Vietnam said.

“We believe the country is one of the few prime investment opportunities in an otherwise lacklustre global economy,” he said, adding that the central bank’s recent decision to set a daily reference rate for the Vietnamese dong will allow it greater flexibility to respond to increasingly volatile market conditions.

Standard Chartered bank’s economists noted that the domestic economy was robust in 2015, recording a faster-than-expected growth of 6.7 per cent. This beat expectations of 6.6 per cent and was the fastest pace of growth since GDP was rebased in 2013.

The report pointed out that consumption is likely to remain the biggest growth driver in 2016, closely followed by investment. The bank forecast that the contribution from investment to growth will be stronger than in 2015 as implemented FDI continues to increase this year.

The study also forecast inflation to be low this year at 1.4 per cent year-on-year, while net exports are likely to remain flat in 2016.

The bank said today’s event was part of its global briefing series, which point out socio-economic trends that will have impact on international business and trade in the year ahead.

The Ministry of Planning and Investment’s Foreign Investment Agency told the press recently that capital from regional neighbours, such as Thailand and South Korea, into Vietnam was increasing.

Economists said China’s economic slowdown and the US Federal Reserve increasing interest rates were driving investor withdrawals from emerging markets.

They said Vietnam should further improve its business environment and enhance labour productivity to take advantage of current capital flow tendencies, especially when FDI in the country reached a record high of roughly $23 billion last year.

Meanwhile, the Foreign Investment Agency (FIA) revealed that foreign direct investment (FDI) in Vietnam rose impressively by 101.2 per cent to more than US$1.33 billion in January of this year.

Up to 127 new foreign-invested projects, worth more than $1 billion, were licensed as of January 20, surging 157.9 per cent against the same time last year while 56 operating ones were approved to raise the capital by $323.4 million, up 19.2 per cent on-year, the agency said it its latest report.

It added that FDI disbursement also experienced a yearly rise of 23.1 per cent to an estimated $800 million.

During the reviewed period, foreign investors pumped investments into 16 sectors. Of these, the manufacturing and processing sector took the lead with more than $905 million, accounting for 67.8 per cent of the total FDI pledged in the country.

With only one large-scale project, capitalised at approximately $211 million, the entertainment industry ranked second, accounting for 15.7 per cent of the nation’s total FDI, while the production and distribution of electricity, gas, hot water and steam, and air conditioners came third with $59.22 million or 4.4 per cent.

Out of 24 countries and territories investing in Vietnam, Singapore was the largest investor with $295.5 million or 22.1 per cent of the country’s total registered FDI. It was followed by Malaysia with $243.6 million or 18.2 per cent, and China with $179.5 million or 13.4 per cent.

In the first month, Ha Noi beat 29 localities to become the most ideal destination for foreign investors. The capital city attracted $243.5 million investments, totalling 18.2 per cent of total FDI registered in the country.

The runners-up were southern Dong Nai Province and HCM City with $183 million or 13.7 per cent, and $163.4 million or 12.2 per cent, respectively.

FIA said the foreign-invested sector recorded a trade surplus of more than $1.59 billion in January as it exported more than $9.74 billion, a year-on-year rise of 3.2 per cent, while its imports slumped 2.2 per cent to $8.15 billion.