Vietnam says pledged foreign direct investment declines 48 pct

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Vietnam's government said pledged foreign direct investment into the nation declined almost 48 percent in the first four months of 2011 from a year earlier.

Committed investment dropped to $4.02 billion, the Foreign Investment Agency of the Ministry of Planning and Investment said in a statement on its website today. Disbursed foreign investment gained 0.6 percent to $3.62 billion, it said.

The nation gave licenses to 262 new projects during the period with a combined registered capital of $3.2 billion, while 88 existing projects boosted registered capital by $818.7 million in total, the ministry said.

Investment by overseas companies is one of Vietnam's main sources of foreign currency, and the government is aiming for pledges of $20 billion in 2011. Officials devalued the dong for the fourth time in 15 months on Feb. 11 in a bid to curb the trade deficit, amid concern the shortfall is depleting Vietnam's foreign-exchange reserves.

"I suspect there is a bit of nervousness about the country," said Tony Foster, managing partner at Freshfields Bruckhaus Deringer in Hanoi. "My instinct is that at the current point of time there is a bit of a slowdown, especially in real estate."

Vietnam has raised interest rates this year to damp a surge in inflation, which climbed to 17.51 percent this month, the highest since 2008.

The increase in borrowing costs has contributed to a slowdown in economic growth. First-quarter gross domestic product rose 5.43 percent from a year earlier, compared with 7.34 percent in the three months through December.

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