A report shows that Vietnam’s GDP per capita in 2013 was $1,900, while the figure is expected to reach $2,200 in 2016. 

The improvement in people’s income, plus the expansion of the financial system and the increased consumption of luxury products all make people think that Vietnamese living standards are far better.

“But do you think we are confused and prosperity is just an illusion?” Huynh The Du, a lecturer of FETP, said. 

Du mentioned three possibilities that may cause the illusion about prosperity.

First, inflation generates the feeling of getting rich. Du, after analyzing statistics, found that the GDP per capita in dong grew by 4.9 percent per annum based on the fixed price. However, as the dong is overvalued, the GDP per capita in dollar increased by 9.5 percent per annum. Thanks to high inflation, the GDP per capita in US dollar has exceeded the $2,000 threshold.

Statistics show that Vietnamese income per capita has been increasing significantly. However, some analysts say this is just a ‘wealth bubble’.

Second, a ‘windfall’, or allowances, from kieu hoi (overseas remittances) or other sources could be the cause. There are two signs. One, all the deposit interests are added to principal, and the total deposit value increased by 2.17 times by the end of 2015. Meanwhile, the other investment channels were ineffective. 

And households’ real average income in the General Statistics Office’s survey increased more sharply than the GDP growth rate per capita at the same time. This means that there is a big amount of money from somewhere.

Third, there must be troubles in statistical work. If the households’ average income growth rate is real, this means that Vietnamese workers can get big benefits from economic growth. However, the reports by GSO about employment don’t show this.

Statistics showed that the wage hired workers in rural and urban areas received in 2007-2015 increased by 4.8 percent and 0.6 percent, respectively, lower than the reported 5.5 percent.

“The figures are contradictory and there is a big gap between the figures and the survey on the living standards,” he said.

In conclusion, he said, it is highly possible that the prosperity is created because there is too much capital flowing into the economy, thus making people have more money. Meanwhile, economic activities themselves do not create much in value.

In related news, Nguyen Xuan Thanh, director of the Fulbright University’s Public Policy Program, said at the 2016 Investment Conference that the consumer sector accounts for a large proportion of Vietnam’s GDP. The proportion was 84.3 percent of GDP in 1990 and 65.1 percent in 2015.


Thanh Lich