Statistical upgrade aids revision of GDP efforts

After reassessment, the Vietnamese economy is expected to enjoy an even bigger scale from next year, better reflecting the country’s economic structure.

Statistical upgrade aids revision of GDP efforts

The government has sent a report to the National Assembly’s (NA) Standing Committee, under which the Vietnamese economy in 2021 is expected to see reassessment in terms of scale, with total GDP of about VND9 quadrillion ($391.3 billion), in the event that the economy will grow about 6 per cent as set by the NA two weeks ago.

If this figure is achieved, Vietnam’s GDP will be higher than that of Singapore ($363.39 billion), Malaysia ($357.27), and the Philippines ($334.04 billion) in 2019, according to calculations by the World Bank and the International Monetary Fund (IMF).

Such a big scale for Vietnam will come from the reassessment of GDP in 2021 under the support of the IMF, in an attempt to make more accurate decisions and policies in macroeconomic monitoring.

Over past years, though Vietnam’s statistical inputs have been improving, data gathered remains insufficient for accurately calculating annual GDP targets. Furthermore, the development of the private sector has not been reflected fully in its data. For example, the performance of 76,000 enterprises, including several giants, has yet to be included in the calculation of the existing GDP size.

In mid-October the IMF released a forecast on economic outlook of the global economy in 2020, under which it projected that this year the Vietnamese economy will rank fourth in Southeast Asia, with a scale of $340.6 billion, bigger than that of Singapore ($337.5 billion) and Malaysia ($336.3 billion), and lower than that of Thailand ($509.2 billion), the Philippines ($367.4 billion), and Indonesia ($1 trillion). The IMF also forecast that per capita GDP this year will rank sixth in Southeast Asia, at $3,497.

Latest government figures show that in 2020 under existing calculations, if the economy grows 2-3 per cent as expected, its GDP is estimated to be about VND6.3 quadrillion ($273.9 billion), up by VND263 trillion ($11.43 billion) against 2019, lower than the on-year increase of nearly VND500 trillion ($21.74 billion) last year. 

A necessity

According to the General Statistics Office (GSO), now is the time for Vietnam to reassess GDP scale as it is an important macroeconomic index.

“The reassessment of the GDP size is aimed to more accurately reflect the scale and capacity of the economy, enhancing the country’s economic status regionally and internationally,” said a recent GSO statement.

In the context that Vietnam is designing its Socioeconomic Development Strategy for 2021-2030 and Development Plan for 2021-2025, the reassessment will help the country make correct orientations for development over the next decade, said the statement.

Minister of Planning and Investment Nguyen Chi Dung said, “It is a necessary and normal job in order to exactly and comprehensively identify the economy’s scale in line with international practice. Many nations have done this job several times, with their economies seeing a 3-4 per cent rise in GDP a year.”

Since 2010, many nations including the US, Canada, Germany, Russia, and Italy have reviewed and revised their GDP scale and other relevant macro indexes.

 

According to minister Dung, the process of GDP reassessment has been conducted in a strict and scientific process with transparency. The process has been consulted by experts and scientists from the IMF and the United Nations.

“More importantly, the reassessment does not lead to change in the GDP calculation method, but has been supplemented with new information and updated statistical regulations of the UN and with reassessed information sources based on surveys over economic sectors that have yet to be included in existing calculations,” the minister said.

Based on such reassessment, Vietnam’s GDP scale increased by an average 25.4 per cent annually in 2010-2017. In 2021, the GDP growth is expected to be about 6 per cent and per capital GDP is forecast to be $3,700.

According to the GSO, the reassessment will have significant impacts on the economy. Specifically, it will create a remarkable increase in the GDP value and per capita GDP, which will help lead to changes in socioeconomic development orientations and consumption models of the public. This also means that Vietnam may sooner reach its wanted status of a high middle-income country. 

Improvements

An IMF team led by Era Dabla-Norris, a division chief of the Asian I Division in the IMF’s Asia Pacific Department and mission chief for Vietnam, carried out a virtual mission over October and November to conduct discussions with Vietnam’s authorised agencies as well as representatives from the private sector, think tanks, academia, and financial institutions.

Norris said that the fiscal response to COVID-19 here has been largely geared towards supporting vulnerable households and firms and has benefited from prudent policies adopted in the past. Monetary policy easing and temporary financial relief measures by the State Bank of Vietnam have alleviated liquidity pressures, lowered the cost of funding, and facilitated continued flow of credit.

“A strong recovery is expected in 2021. Growth is projected to strengthen to 6.5 per cent as normalisation of domestic and foreign economic activity continues. Fiscal and monetary policies are expected to be supportive, although to a lesser extent than in 2020. Inflation is expected to remain close to the authorities’ target at 4 per cent,” Norris said.

Spanish data firm FocusEconomics told VIR last week that its updated forecast showed that Vietnam’s economy may grow 2.7 per cent this year before soaring to 7.3 per cent next year, and 6.8 per cent in 2022 – rates that are the highest in Asia. VIR

Dat Nguyen

New report finds GDP growth revised up 25.4 per cent in 2010-2017

New report finds GDP growth revised up 25.4 per cent in 2010-2017

A new report on Vietnam's macroeconomics and GDP revision has been released by Prof Can Van Luc and researchers from the BIDV Training and Research Institute

The State does not favor any economic sector

The State does not favor any economic sector

Assoc. Prof Dr. Vu Van Phuc proposed adding to the draft Political Reports submitted to the 12th Party Congress a section on economic sectors in the transitional economy to socialism in Vietnam.

 
 

Other News

.
Vietnam's economic growth to recover from Q4: Economist
Vietnam's economic growth to recover from Q4: Economist
BUSINESSicon  11/10/2021 

The Vietnamese economy is likely to gradually recover from the fourth quarter of 2021 and escape the minus growth seen in the third quarter.

Vietnam to pilot Mobile Money service for two years
Vietnam to pilot Mobile Money service for two years
BUSINESSicon  11/10/2021 

Vietnam will pilot Mobile Money service across the country for two years before officially launching it, according to Deputy Governor of the State Bank Dao Minh Tu.

Rapid vaccination and targeted policies key to Vietnam’s endemic growth
Rapid vaccination and targeted policies key to Vietnam’s endemic growth
BUSINESSicon  11/10/2021 

As the world is transitioning from pandemic to endemic, Vietnam needs to ensure its vaccination progress and greater adeptness at targeting control measures and support policies to follow suit.

Venture capital in Vietnam may surpass US$1 billion in 2021
Venture capital in Vietnam may surpass US$1 billion in 2021
BUSINESSicon  11/10/2021 

Venture capital in Vietnam will reach $600 million and may surpass $1 billion in 2021. The country is expected be an attractive destination for venture capital funds in the following years.

Vietnamese currency forecast to strengthen against US dollar in 2021
Vietnamese currency forecast to strengthen against US dollar in 2021
BUSINESSicon  11/10/2021 

Since July 2021, the Vietnamese dong has strengthened by 1.3 per cent against the US dollar and the unit has averaged VND23,930 per US dollar in the year-to-October.

Foreign businesses continue to see Vietnam as a good investment location
Foreign businesses continue to see Vietnam as a good investment location
BUSINESSicon  11/10/2021 

While a number of foreign companies have moved part of their production or orders to other countries, many said they still see Viet Nam as a good...

Will Mobile World open new TopZone chain abroad?
Will Mobile World open new TopZone chain abroad?
BUSINESSicon  11/10/2021 

The Gioi Di Dong (Mobile World) has revealed the opening of a new chain named TopZone, with many indications that it will be their second retail chain abroad.

Domestic petrol prices to reach new highs on global market rally
Domestic petrol prices to reach new highs on global market rally
BUSINESSicon  10/10/2021 

Retail petrol prices in Vietnam are likely to reach new highs when the Ministry of Finance and the Ministry of Industry and Trade announce their price adjustments on October 11.

Media, businesses together overcome impact of Covid-19 pandemic
Media, businesses together overcome impact of Covid-19 pandemic
BUSINESSicon  10/10/2021 

The online forum "The press accompanies businesses to restore production and business, overcome the impact of the pandemic" to mark Vietnam Entrepreneurs' Day on October 13.

Efforts made to protect interests of Vietnamese products in EU market
Efforts made to protect interests of Vietnamese products in EU market
BUSINESSicon  10/10/2021 

Vietnam has taken various measures in a bid to protect the interest of Vietnamese products and exporters in the EU markets, according to the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade (MoIT).

Local property market expects strong rebound
Local property market expects strong rebound
BUSINESSicon  09/10/2021 

The country’s real estate market has seen positive signs for recovery following the economic reopening, experts said.

'Nike leaves Vietnam': phony news and warnings
'Nike leaves Vietnam': phony news and warnings
FEATUREicon  10/10/2021 

"Nike is leaving Vietnam" has been confirmed as misinformation. Nike does not own any factories in Vietnam, but only hires partners in Vietnam to process its products.

Nine ministries want to return VND8 trillion of public capital
Nine ministries want to return VND8 trillion of public capital
BUSINESSicon  10/10/2021 

Nine ministries have told the Ministry of Finance they want to return a total of VND 8,054 billion of foreign loans that they could not disburse.

Vietnam works towards responsible, sustainable fishery sector
Vietnam works towards responsible, sustainable fishery sector
BUSINESSicon  09/10/2021 

Vietnam’s fishermen, businesses and government have joined hands in implementing fishing regulations, in a bid to have the European Commission (EC)’s illegal, unreported and unregulated (IUU) fishing “yellow card” removed. ​

Resumption of flights to Hanoi, no concentrated quarantine for people with negative Covid tests proposed
Resumption of flights to Hanoi, no concentrated quarantine for people with negative Covid tests proposed
FEATUREicon  09/10/2021 

The Vietnam Aviation Business Association (VABA) has cities and provinces to resume flights to their localities, especially flights to/from Noi Bai, Da Nang and Tan Son Nhat, on October 10.

Which bailout package for the economy will be passed?
Which bailout package for the economy will be passed?
FEATUREicon  09/10/2021 

Minister of Planning and Investment Nguyen Chi Dung has been assigned a difficult task – drafting a program on recovering and developing the economy in association with improving economic autonomy in 2022-2023.

Wind and solar power: race to exploit endless resources
Wind and solar power: race to exploit endless resources
FEATUREicon  08/10/2021 

In the Draft Power Development Planning 8, one of the power source scenarios with the highest scores is the development of power sources associated with renewable energy under Resolution 55 of the Politburo.

Vietnamese giants acquire foreign corporations
Vietnamese giants acquire foreign corporations
FEATUREicon  11/10/2021 

In 2020, Masan took over the tungsten division of H.C. Starck Tungsten, the world’s leading manufacturer with thermal resistance technology, as part of its plan to become a leading high-tech industrial material manufacturer.

Military Bank named among ‘Best Companies to Work for in Asia 2021’
Military Bank named among ‘Best Companies to Work for in Asia 2021’
BUSINESSicon  08/10/2021 

The Military Commercial Joint Stock Bank (MB) on October 8 received the "Best Companies to Work for in Asia 2021" award by HR Asia, a leading HR magazine in Asia.

Vietnam’s steel group in the world’s top 15 for market capitalization
Vietnam’s steel group in the world’s top 15 for market capitalization
BUSINESSicon  08/10/2021 

Hoa Phat Stee Group of billionaire Tran Dinh Long has entered the world's top 15 corporations in terms of market capitalization.

 
 
 
Leave your comment on an article

OR QUICK LOGIN