The director-general of the Viet Nam General Statistics Department Do Thuc discusses issues related to Gross Domestic Product calculations.
In the first quarter of 2013, Viet Nam's credit growth was less than 1 per cent while the GDP was almost 5 per cent. What is your comment on the two figures?
First of all, I just want to clarify the 1 per cent growth in credit. The growth there refers to the lending credit from commercial banks and it was released by the State Bank of Viet Nam (SBV).
The outstanding debt depends on both the banks' total lending and the debt payment. There is no doubt that commercial banks are an important channel among others in the supply of capital to businesses and production.
According to a survey conducted by the GSO, the enterprise capital ratio between "own equity" and capital mobilised from commercial banks is 1.15-1.35/1.
In our present socio-economic conditions, the economic growth mainly leans on capital and labour (the Total Factor Productivity (TFP) which is very modest). So if we want to increase GDP, we have to increase the investment. This relationship cannot be adjusted overnight. It needs at least a year or several years. So I don't think it is proper to link credit growth of 1 per cent with GDP growth of 5 per cent in the first three months of 2013. Let's recall in the first quarter of last year the credit growth was minus 1.2 per cent while the GDP growth was 4.75 per cent.
Many countries have applied the same approach to measure their GDP.
Will you please further elaborate on the approach Viet Nam uses to measure its GDP?
There are three approaches to measure GDP. They are production, income and expenditure approaches.
In Viet Nam, we use the production approach to calculate GDP, on both an annual and quarterly basis.
There are discrepancies in statistics between the national general statistics office and sector or local statistics offices. Do you think these discrepancies will affect the reliability of statistics given by your office and how do you rectify such a situation?
Yes, this is a reality. That's why GDPs from central provinces and cities are always higher than that of the nation. Indicators of the same target – for example, the poverty rate or unemployment rate – calculated by the GSO are different from those of ministries and sectors.
However, both the national GDP and provincial/city GDPs have used the same concept, content and measuring approach as well as input information since 1993. But due to a lack of information and equipment, it is not easy to aggregate the information for each locality of one type of business that operates in various provinces/cities, like electricity, airlines, railways, banks or post office and communications, and so on.
On the other hand, other attributes that make some local GDPs much higher than that of the national GDP are the "achievement disease" of local authorities.
My department, the GSO, is launching a project to overcome the discrepancies in the GDPs between central and local governments to ensure statistics nation-wide are in harmony. We understand that this is a demanding job but we're determined to do it. — VNS