Economic growth analysed as ICOR rises

07-Jan-2007 Intellasia | 07-JAN-2002 Thoi Bao Kinh Te Viet Nam, Page 4 | 2:03 PM Print This Post

Gross domestic product growth in 2001 officially rose by 6.8% compared with 2000, among which agriculture rose by 2.7%, industry 10.4% and services by 6.1%.

These rates are high but fell short of targets—particularly agriculture which fell last year. Previous rates in 1992–2000 were: 1992 6.88%; 1993 3.28%; 1994 3.37%; 1995 4.8%; 1996 4.7%; 1997 4.33%; 1998 3.53%; 1999 5.23%; and 4.04% in 2000.

However, GDP in 2001 did reverse a fall over the past three years: 1998 5.8%; 1999 4.8%; and 6.7% in 2000. Industry also fared considerably better: 1998 8.33%; 1999 7.68%; 2000 10.07%. For service the corresponding rates were: 1998 5.08%; 1999 2.25%; and 5.57% in 2000.

Sector share of GDP also proved reasonably positive with agriculture share of GDP falling as increased industrialisation takes hold: 1998 25.78%; 1999 25.43%; 2000 24.30%; 2001 23.30% while industry share grew increasingly larger: 1995 28.76%; 1996 29.73%; 1997 32.08%; 1998 32.49%; 1999 34.49%; 2000 36.61%; 2001: 37.57%.

GDP growth rate in 2001 was high in Vietnam compared with other countries, for example the US: 1.1%, Japan -0.8% and the average global GDP growth rate of 1.3%.

However, Vietnam’s economy is still not regarded as efficient due to a constant slippage in services as a share of GDP: 1995: 44.06%; 1996 42.51%; 1997 42.15%; 1998 41.73%; 1999 40.08%; 2000 39.09%; 2001 38.95%.

The low economic efficiency is more aptly demonstrated by the incremental capital-output ratio (ICOR)—which shows how many units of capital are required to produce a single unit of output—which has increased to worrying levels: 1996 3.7; 1997 4.5; 1998 5.7; 1999 6.8; 2000 5.3; and 5.4 by 2001.

 


Category: Economy

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