1. Vietnam:
Institutional arrangement in GDP
measurement of provenience /city
and national economy and
solution to reconciliation of
differences between national GDP
and regional GDP in Vietnam
Nguyen Van Nong
Deputy Director, SNA Department
GSO, Vietnam

2. Vietnam:
* 331211,6 Sq.km ,
* 86 210,8 thous. pers
* 63 provinces in 6 Regions as below:
+ Red River Delta : 11 Provinces;
+ Northern Midlands and Mountain areas : 14
provinces;
+ North. Central and Central Coastal areas:14
provinces;
+ Central Highlands : 5 provinces;
+ South East : 6 provinces;
+ Mekong River Delta: 13 provinces;

3. I . DEMAND FOR INTEGRATED INDICATORS IN NATIONAL
ACCOUNTS BY REGION (PROVINCE/ CITY)
 Based on the social-economic management system in the
country, cities and provinces in Vietnam are given
responsibility for establishment local economic development
plan with own budget. Thus calculation of some integrated
economic indicators of SNA by region/provinces is
necessary to meet the following demands :
 Assess economic growth rate and structural development of
the region.
 Assess the comparative advantages of the region as well as
protect and manage natural resources, environment
 Assess social needs and manage regional budget .
 Serve as part of a statistical database for social – economic
development strategy of the whole country.

4. II. institutional arrangement and GDP
ESTIMATION PROCEss OF NATIONAL
ECONOMY AND BY PROVINCE AND
CITY
(called the decentralization process applied from
1994 to 2009)
 Currently, GO, GVA/ GDP of national
economy are independently compiled by
central statistical office (GSO) while similar
indicators at local level are compiled by
provincial statistics offices (PSO):

5. 1. Institutional arrangement and GDP measurement
process
a. Calculation of national GDP by GSO:
 GDP = GO - IC + import duties, as follows:
* Branch statistics departments are in charge of collecting
information and calculating national GO by kind of industry and
by kind of ownership at current and constant prices to provide
to SNA department for the compilation of national GDP.
* National GVA /GDP at current and constant prices are calculated
on the basis of national GO and input-output or value added-
output ratios by kind of industry and by kind of ownership.
* National GDP at current and constant prices by industry and by
ownership are published quarterly, yearly
b. Calculation of GDP by province and city:
 Similar to calculation at national level, identification of RGDP by
province and city is based on production method (RGDP = RGO
– RIC + import duties). These are compiled at the provincial
level by PSO following the same procedures as adopted at the
central level.

6. 2. Achievements and shortcomings
a. Achievements
After 17 years of implementing the compilation of
regional/provincial account indicators at 63 province
and cities, the following key outcomes can be drawn:
a.1. The indicators meet crucial needs of local
governments and regional economic research,
allowing them to evaluate economic growth rate, and
shift in national and local economic structures.
a.2. They serve as the basis to formulate social-
economic development plans and strategies designed
by National and Provincial Assembly.
a.3. GSO has been able to set up the procedures and
and methodology for regional account indicators
compilation.
a.4. GSO has been able to train a large number of
national and provincial accountants.

7. b. Limits and shortcomings
The practice adopted for compiling regional/provincial
account indicators shows the following weaknesses:
low data quality, large discrepancy between national
GO and GDP at one side and RGO and RGDP at the
other side.
b.1 The total of RGDP of 63 provinces is far bigger
than the national figure:
* 5.0% (2005) and 8.2% ( 2007) at current prices;
* 24% (2005) and 32% ( 2007) at constant prices;
b.2 The growth rate of RGDP for 2005 was 2.37 %
higher than the national rate and for 2007 was 2.51%
higher. This means that in 2007, GSO annouced the
growth rate of 8.5% while the provincial average rate
was 11%.

8. c. Causes of the differences:
c.1. Scope and sources of information are not
inconsistent and inadequate as the statistical
unit in Vietnam is the enterprise, and not the
establishment as recommended by the UN:
c.2. Price and price indexes get troubles:
 One of the reasons for this is the inconsistency among
provinces in calculating RGDP in constant prices:
 Some provinces do not deflate output in current values,
but calculate gross output of Agriculture, Forestly and
Industry in constant prices using a list of fixed price per
output quantity of a base year.
 Some provinces, that don’t have their own price index,
use national price indexes constructed by the General
Statistic Office, or price indexes developed by other
provinces.

9. c.3. Independence and objectiveness of
statistics are not respected due to
competition for high achievement of
local governments.
c.4. Compiling procedures and methods
of GDP and RGDP are still inadequate,
inconsistent and there’s lack of closed
cooperation between central level and
local level.
c.5. Statisticians’ qualification is still
limited, particularly at provincial /cities
level.

10. III. SOLUTIONS TO reconile DIFFERENCEs AND
ERRORS BETWEEN NATIONAL GDP AND RGDP
To deal with the above gap, GSO is planning to implement
the following during the 2010 to 2013 period:
1. The first: The GDP and RGDP compilation procedure
remains the mixture of centralization and decentralization,
using the production approach but with important changes
in shared responsibility:
a. For central level (GSO)
GSO are in charge of compiling national GO and GDP. In
data collection, GSO is responsible for calculating and
allocating to provinces and cities GO, IC, GVA and import
duties of corporations, government units and other
organizations which have large scale and multi-
establishments in different provinces (with more than one
establishment situated in various provinces).

11. b. For provincial level (PSO)
PSOs directly collect and calculate GO, GVA of
corporations, local government units, household
businesses, other organizations that operate only
locally. These data are then combined with data
on multi-regional units collected and processed by
GSO.
2. The second: To identify establishments and
ancillary units of multiregional enterprises,
corporations as residents by provinces and cities.
3. The third: National GDP and RGDP at current
and constant prices are published quarterly, yearly
by GSO only.

12. Thank you for
your attention