Title: Foreign direct investment into real estate and macroeconomic instability in Vietnam

Authors: Quoc Hoi Le

Addresses: Faculty of Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam

Abstract: In recent years, foreign direct investment (FDI) into real estate in Vietnam has been constantly increasing and is becoming the most attractive business area for foreign investors. Beside positive impacts such as augmenting capital resources and improving socio-economic infrastructure, this paper shows that FDI into real estate in Vietnam contributes to the derivation of macroeconomic instabilities such as raising inflation, causing instability in the exchange rate, payment balance, and the banking system. That reality requires the government to implement solutions relating to strengthening the control of FDI inflows into real estate, monitoring real estate credit risks as well as directing FDI inflow into relevant business areas, both to use the capital effectively and to avoid causing macroeconomic instability.

Keywords: foreign direct investment; FDI; real estate; macroeconomic instability; Vietnam; capital resources; socio-economic infrastructure; inflation; exchange rates; balance of payments; banking industry; credit risks.

DOI: 10.1504/AAJFA.2016.079294

Afro-Asian Journal of Finance and Accounting, 2016 Vol.6 No.3, pp.258 - 268

Received: 08 May 2015
Accepted: 12 Feb 2016

Published online: 26 Sep 2016 *

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