Vietnam’s economic growth will continue to be driven by high-tech foreign investments for many years, according to VinaCapital chief economist, Michael Kokalari. 

Economic growth has been accelerating in 2022, leading the World Bank and International Monetary Fund to upwardly revise their GDP growth forecasts for the country. An increasing number of economists now predict growth will surpass 8% this year.

Kokalari stated that foreign direct investment (FDI) is boosting Vietnam’s growth, supporting manufacturing and leading to a rise in goods produced in the country.

He added that a rise in the complexity of the products a country is able to manufacture is the strongest growth driver for a developing country's economy, Vietnam Plus reports.

“The recent announcements by Samsung, Apple and others make us confident that high-tech foreign investments will continue propelling Vietnam’s economic growth for years to come,” he stated.

Indeed, Vietnam’s largest foreign investor, Samsung has announced it is to begin producing semi-conductor parts in the country, whereas Apple is to start the production of MacBooks and watches in Vietnam, the first time they’ll be manufactured outside of China.

FDI is key in helping “developing economies move into higher value-added parts of the value chain,” according to research by the London School of Economics and the World Bank, and high-tech FDI has had a majorly positive impact on Vietnam’s economy.

In addition, Vietnam made the biggest leap up the Harvard Economic Complexity Index ranking over the last 20 years, in part due to investments made by Samsung and Intel attracting other high-tech investments from Apple, LG and Dell, amongst others.

The key reasons for businesses setting up high-tech factories in the country are the proximity to high-tech supply chains in Asia, as well as a highly skilled workforce, Kokalari added.