VINACHEM

The Vietnam gross domestic product jumped to 6.2% for the three months leading up to July on the back of a resurgence in exports of Samsung Electronics, reports the Nikkei Asian Review.

Most of the recovery is attributable to Samsung, which makes smartphones and ordinary mobile phones at factories located throughout northern and southern Vietnam, says Nikkei.

Following widespread recalls of the fire-prone Galaxy Note 7 phones by Samsung, the GDP of Vietnam fell to 5.1% for the first quarter of the year because of the company’s depressed exports.

Samsung accounts for roughly 20% of the exports for Vietnam, says Nikkei.

Samsung is not the only business based out of the Republic of Korea that is driving the growth of the Vietnamese economy, Nikkei notes, saying that LG Electronics, the Lotte Group and others are also expanding their footprint in the Southeast Asian country.

Nikkei adds that these companies from the ROK have been the largest source of foreign direct investment in Vietnam for the past three consecutive years, starting in 2014, which has some experts concerned the two economies are too closely tethered.

While forays by companies from the ROK have fueled GDP growth over the past several years, the manufacturing sector in Vietnam still faces many obstacles in getting its competitiveness up to the level of other ASEAN countries.

Chief among the complications is finding the finances to develop railroads, highways and other infrastructure, says Nikkei. - VNN -