Vietnam to include informal economic sector into GDP calculation by 2020
The Hanoitimes – The statistics figure would be updated annually into the GDP, GRDP and key social-economic indicators, which will later be released on a quarterly basis.
Prime Minister Nguyen Xuan Phuc has approved the proposal to calculate the unobserved economic sector, with a view to including these statistics into gross domestic product (GDP) calculation by 2020.
Based on the proposal, five components of an unobserved economy include shadow economy, illegal economy, informal sector, household production for self-consumption and economic activities that are missed out by data collection programs.
The General Statistics Office (GSO) is tasked with pilot measurement of the sector, starting in 2019. The statistics figure would be updated annually into the GDP, GRDP and key social-economic indicators, which will later be released on a quarterly basis.
In a meeting with the outgoing Chief Representative of the IMF in Vietnam Jonathan Dunn on February 13, Phuc requested support from the International Monetary Fund (IMF) in calculating and updating information on the country’s unobserved economic sector, which allegedly makes up a large proportion of the GDP.
At the meeting, Dunn said, by reviewing the informal economic sector, the IMF would help Vietnam calculate the nominal GDP more accurately. He added that even the statistics of the formal economy calculated in the GDP are unable to fully reflect factors which are only updated every 10 years.
A study by Fulbright University in 2018 estimated that Vietnam’s informal economic sector made up 25 – 30% of the GDP and 57% of the total workforce.
Vietnam’s nominal GDP in 2018 stood at VND5,535.3 trillion (US$237.64 billion), expanding 7.08% from 2017, marking a 10-year high growth rate. The GDP per capita was US$2,587, up US$198 compared to 2017, according to the GSO.