Country Briefings: Vietnam
Economic structure
Apr 14th 2004
>From the Economist Intelligence Unit
Source: Country Profile
Agriculture declines as a percentage of GDP
Measured by employment, Vietnam is an agrarian society, with around 65% of the labour force working in agriculture, forestry and fisheries. Despite robust growth in value added of 4% annually over the past decade, the agricultural sector currently accounts for just 23% of GDP, down from 40% in 1991. Between 1997 and 2001 there was spectacular growth in the output of pepper (338%) and coffee (100%), making Vietnam the world's second largest exporter of these commodities. Over the same period there was robust growth in the output of rubber (61%), tea (60%) and rice (16%), for which Vietnam is routinely the world's second or third largest exporter.
Main economic indicators, 2002
Real GDP growth (%) 7.0
Consumer price inflation (%; av) 3.8
Current-account balance (US$ m)- 682(a)
Foreign debt (US$ bn) 12.6(a)
Exchange rate D:US$ (av) 15,280 (a) 2001
Source: IMF, International Financial Statistics.
Industrial growth has been broadly based
Industrial GDP grew by more than 10% annually over the past decade, and industry and construction contributed around 39% of GDP in 2002. By this measure, Vietnam is a highly industrialised country. Industry is relatively well diversified, and all subsectors of industry have expanded over the past decade, with particularly rapid growth in steel products, garments, footwear, cement and vehicle assembly. Mining (mainly oil and gas) accounted for 26% of industrial GDP in 2000, up from 17% in 1995; oil production has now reached a plateau, while gas production is expected to rise rapidly over the medium term.
The state-owned sector generated 40% of industrial output (by value) in 2002, but its share continues to fall because its growth has lagged behind that of foreign-invested and local private firms. The private manufacturing sector, despite its smaller contribution to industrial GDP (25%), employs four times as many workers as the state sector. As in China, private firms have emerged as the fastest growing part of the manufacturing sector. Foreign-invested firms account for the remaining 35% of industrial GDP (including 10% attributable to oil and gas).
Investment's share of GDP has increased
The share of investment in GDP rose rapidly from 11% in 1990 to 32.3% in 2002. The rise in investment has been financed by increased government savings (almost 8% of GDP in 2002), continued foreign direct investment capital (6% of GDP), and a compression of domestic consumption, which has permitted domestic non-government savings to rise. The relative stability of aid-financed investment projects helps to explain the apparent stability of the investment rate, which in other countries is often the most volatile component of GDP.
Comparative economic indicators, 2002
Vietnam Indonesia Philippines Thailand China India
GDP (US$ bn) 35 173 78 126 1,287 502(a)
GDP per head (US$)435 807(a) 939(a) 1,991 1,002 479(a)
Consumer price inflation (%; av) 3.8 11.9 3.1 1.7 -0.8 3.2
Current-account balance (US$ bn)- 0.6(a) 7.5 4.2 0.6 35.4 4.5(a)
Exports of goods (US$ bn) 16.5(a) 58.8 34.4 66.9 325.7 50.7(a)
Imports of goods (US$ bn) 17.6(a) 35.6 40.0 57.1 281.5 57.1(a)
Foreign trade (% of GDP)(b) 97.4(a) 54.6 95.4 98.4 47.2 21.5(a)
Foreign debt (% of GDP)( a) 37.9 76.3 68.7 46.1 14.3 19.3
(a) Estimates. (b) Merchandise exports plus imports.
Sources: Economist Intelligence Unit; national sources.
Copyright © The Economist Newspaper Limited 2004. All rights reserved.