Service sector sees biggest increase after GDP recalculation

It was followed by the industry and construction sector, up VND211-555 trillion ($9.1-23.9 billion) a year. The agriculture, forestry, and fisheries sector rose VND25-46 trillion ($1.1-2 billion) per year.

After revising its GDP methodology to match international standards, the agriculture, forestry and fisher sector’s GDP contribution decreased from 17.4 percent to 14.7 percent, according to the General Statistics Office (GSO).

The industry and construction sectors grew from 33 percent to 34 percent of GDP, while the service grew from 39.2 percent to 41.2 percent.

With the revised methodology, Vietnam formally raised its GDP by an average 25.4 percent for the 2010-2017 period. The figure was recalculated by the General Statistics Office (GSO) in August, but formalization was delayed to give the government more time to assess its impacts.

2017’s GDP has been raised to VND6.3 quadrillion ($271.3 billion) from VND5 quadrillion ($215.7 billion), up 25.7 percent. 2011’s GDP rose the most at 27.3 percent, while 2015 registered the lowest revision at 23.8 percent.

Macroeconomic indicators have also been adjusted following the change in scale of the economy. GDP per capita in 2017 rose to VND66.8 million ($2,985) from VND53.5 million (2,298). Public debt to GDP ratio by the end of 2017 fell to 48.8 percent from 61.3 percent, and budget deficit to 2.8 percent from 3.5 percent.

This reassessment was not meant to highlight achievements but aimed at better reflecting the real size and structure of the economy, so that Vietnam sets the right targets in its socio-economic development strategy for the next ten years, said Nguyen Bich Lam, director general of the GSO.

Although the revision does not deliver any immediate benefits to the people, it helps the Government have a more realistic view of the economy and formulate appropriate policies, and this will benefit the people in the future, Lam said.

Kamal Malhotra, United Nations Resident Coordinator in Vietnam, said that the GDP revision was necessary and has been done by many countries. Having a more realistic scale of the economy would also help businesses structure their strategies in production and business activities better, he said.

The new methodology, one recommended by the UN, involves new sources of statistics such as additional information from the latest general survey, new administrative documents and updated national accounts.

The new GDP figures will not be used in reports to the National Assembly or the Party until after 2020, Prime Minister Nguyen Xuan Phuc had informed the parliament last month.

Vietnam is one of Southeast Asia’s fastest growing economies, with growth averaging 6.55 percent in the last five years, fueled by robust exports and foreign investment.

According to the GSO’s previous calculations, the GDP grew at 7.08 percent last year, the highest in a decade.