Dec 30, 2013

Vietnamese get richer thanks to new calculation method

Follow Me on Pinterest
VietNamNet Bridge – For the majority of Vietnamese, 2013 is a difficult year when they have to cut down expenses to exist. Meanwhile, the General Statistics Office (GSO) at the end of the year reported an impressive increase in the income per capita.

At the donors’ meeting on December 5, 2013, the Vietnamese Prime Minister Nguyen Tan Dung announced that the Vietnamese income per capita had reached $1,960 per annum.

The figure released at the 2012 meeting was $1,600. As such, the Vietnamese income per capital has increased sharply by $360, or by 22.5 percent just over the last year.

The high income per capita is really a big surprise to Vietnamese, if noting that the GDP grows by 5.3-5.4 percent only in 2013, while the inflation rate is 7 percent.

The sharp income increase has also been reported by HCM City authorities which became a hot topic for discussion at the city’s people’s council meeting in mid-December.

The city’s report showed that its GDP growth rate in 2013 is 9.3 percent, lower than the targeted level. However, the GDP per capita reaches $4.513, higher than the targeted level at $4,000.

Chair of the HCM City People’s Council Nguyen Thi Quyet Tam said at the meeting that it is questionable that the city’s GDP growth rate is modest, while the GDP per capita increase is so high. She asked to clarify this.

According to the HCM City Planning and Investment Department, in 2012, the GDP per capita was calculated in accordance with the 1994’s fixed prices, which showed the result of $3,600 per person.
The 2012 income per capita was re-calculated in mid-2013 with the new calculation method, in accordance with the 2010’s fixed prices, which showed the result of $,4000.

This means that the change in the calculation method has helped every Vietnamese earn $400 more by the end of 2012.

The explanation remains enigmatic to analysts. They cannot understand why the GDP growth rate is calculated in accordance with comparable prices (the inflation excluded, on the same denominator), while the GDP per capita is calculated in accordance with the current prices.

GSO said that while collecting information for the statistical work in recent years, it has found that the released figures still cannot reflect all the real achievements. Therefore, it spontaneously increased the scale of the added value in the banking sector and the depreciation of population’s houses.

The GSO’s move has made economists confused. The statistics released in 2012 and earlier have become meaningless, because they cannot be used for comparison, once the statistics do not have the same denominator.

GSO has been asked to explain the changes in the calculation method before the public on mass media.
The big changes in the calculation method and the differences in figures would create a lot of problems. What figures will the Ministries of Finance and Planning and Investment refer to when programming the state budget spending or government bond issuance.

The different calculation methods have produced the two different figures with the wide gap of VND300 trillion. This will lead to a big gap of tens of trillions of dong in the allowed budget overspending (5.3 percent of GDP).


Business & Investment Opportunities 

Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. 

No comments:

Post a Comment