In HSBC’s report “The World in 2050” which forecasts how the economic landscape will change over the next 40 years, HSBC projected the country’s annual growth at 5.2 per cent with its GDP rising to $451 billion by 2050.
According to HSBC, as the world’s second-largest exporter of rice, agricultural exports has always made a major part in Vietnam’s economy. However this is rapidly changing as the government moves to liberalise and diversify the economy.
While state-owned enterprises contribute 40 per cent of the country’s GDP, overseas investment has been increasing sharply since the country became part of the World Trade Organisation in 2007.
Vietnam’s low-cost manufacturing base has attracted a wave of foreign investors, particularly in the retail clothing and technology sectors, as an cheaper alternative to China.
Intel, the first international technology company to make a major investment in the country six years ago, has helped to raise Vietnam’s profile as an investment destination. A long list of companies including Samsung, Canon and Foxconn have followed, investing millions of dollars into developing manufacturing operations in the country.
Analysts say this is helping to lay the foundations for Vietnam to become Asia’s next big electronics manufacturing hub, said HSBC in its report.