STRUCTURE OF VIETNAM’S GDP
A. INTRODUCTION:
The condition of the whole economy has deeply affected us all. Hence, there must be
someone to monitor all the activities in the market for goods and services and the market
for production’s factors if we want to know what all is happening in the economy . We
need to know a real number of macroeconomic, especially when studying about: How much
production in a year is, How much income from production goods and services is, or Where
income and output shifts, etc. To explain these problem, economists and policymakers in
Vietnam as well as in the world have used the data to track the performance of the whole
economy . One of these figures is that the Gross domestic product (GDP). After analyzing
GDP’s structure, they can come out with policies to impulse the development of the whole
economy. Therefore, it is very necessary to acknowledge the significance of GDP to
evaluate the economy’s scale. Being aware of its important, we-group 1, has chosen the
topic: Structure of Vietnam’s GDP to make this essay. This is an interesting topic, and it
covers a lot of different issues. Also, this is one of the strategic problems of macro-economy
which government and economists are interested in.
Because of our limited knowledge, there may be some mistakes in the essay. Hopefully, we
can get your suggestion and comments to make it better.
B. MAIN CONTENT:
I. BASICS ABOUT GDP:
1. The definition of GDP:
* GDP is the market value of all officially recognized final goods and services produced
within a country in a year, or other given period of time.
* GDP measures an economy’s total expenditure on newly produced goods and services
and the total income earned from the production of these goods and services.
2. Structure of GDP:
* First of all, we should find out about what Economic structure is. Economic structure is
correlated across sectors in the overall economy, showing organic relationship and the
interaction of both quantity and quality between sectors together.
In terms of volume, the economic structure is determined by the proportion of the value of
the composition of the sectors in GDP. Therefore, GDP’s structure is based on Economic

structure. There are many way to approach to GDP’s structure such as by sectors, economic
sectors, regions and territories, etc.
And now we will delve into Structure of GDP by sectors.
II. STRUCTURE OF GDP BY SECTORS:
1. Three-sector hypothesis:
The classical breakdown of all economic sectors follows:
• Primary: The primary sector of the economy is the sector of an economy making direct
use of natural resources. This includes agriculture, forestry, fishing, mining, and
extraction of oil and gas. This is contrasted with the secondary sector, producing
manufactured goods, and the tertiary sector, producing services. The primary sector is
usually most important in less developed countries, and typically less important in
industrial countries. The manufacturing industries that aggregate, pack, package, purify or
process the raw materials close to the primary producers are normally considered part of this
sector, especially if the raw material is unsuitable for sale or difficult to transport long
distances. Primary industry is a larger sector in developing countries; for instance, animal
husbandry is more common in Africa than in Japan. Mining in 19th century South Wales is
a case study of how an economy can come to rely on one form of business
• Secondary: The secondary sector of the economy or industrial sector includes
those economic sectors that create a finished, tangible product: production
and construction. This sector generally takes the output of the primary sector and
manufactures finished goods. These products are then either exported or sold to domestic
consumers and to places where they are suitable for use by other businesses. This sector is
often divided into light industry and heavy industry. Many of these industries consume large
amounts of energy and require factories and machinery to convert the raw materials into
goods and products. They also produce waste materials and waste heat that may pose
environmental problems or cause pollution.
• Tertiary: The service sector consists of the "soft" parts of the economy, i.e. activities where
people offer their knowledge and time to improve productivity, performance, potential, and
sustainability, what is termed affective labor. The basic characteristic of this sector is the
production of services instead of end products. Services (also known as "intangible

goods") include attention, advice, access, experience, and discussion. The production
of information is generally also regarded as a service, but some economists now attribute it
to a fourth sector, the quaternary sector. The tertiary sector of industry involves the
provision of services to other businesses as well as final consumers. Services may involve
the transport, distribution and sale of goods from producer to a consumer, as may happen in
wholesaling and retailing, or may involve the provision of a service, such as entertainment.
The goods may be transformed in the process of providing the service, as happens in
the restaurant industry. However, the focus is on people interacting with people and serving
the customer rather than transforming physical goods.
2. The determinants of GDP’s structure by sectors:
- Market factors and consumer demand for society.
- The level of development of Labor
- The managing mechanism
- The strategic perspective, the goal of economic development in certain phases
III. STRUCTURE OF VIETNAM’S GDP BY SECTORS:
1. Structure of VN’s GDP by sectors :
Vietnam’s GDP by sectors is divided into 3 sectors:
-Primary: Agricultural, forestry, fishing
-Secondary: Industry, construction
-Tertiary: Services.
2. STRUCTURAL CHANGE IN VIETNAM’S GDP BY SECTORS:
a. The general trend:
• Period 2001-2012:
• TREND:
- Proportion of Primary reduced from 23,34% (2001) to 21,65% (2012)
- Proportion of Secondary slightly rose from 38,15% (2001) to 40,65%(2012)
- Proportion of Tertiary decreased to 37,7% in 2012
- Proportion of Agriculture fluctuated from 2005 to 2010 but in overall, it slightly
increased, accounting for 71.46% in 2005 and 75.86% in 2010.
- Proportion of Forest slightly decreased from 3.70% in 2005 to 2.63% in 2010.

- Proportion of Fishery was unstable and decreased from 24.84% in 2005 to 21.51% in
2010.
• REASONS:
- Government focused on developing some activities such as: investing in some
industrial services and some strong industries (mechanics, energy ) Moreover,
government established industrial zones in major economic regions with Industrial
triangle (ex: North region: Ha noi-Quang ninh-Hai phong)
• 2013:
According to the official figures from the General Statistics Office, Gross domestic product
(GDP) of Vietnam in 2013
- increased by 5.42% compared with 2012 and it was lower than the target set
before.
- In the first quarter GDP rose 4.76%, the second quarter increased 5.00%, the
third quarter rose 5.54% and the fourth quarter rose 6.04%.
- Despite the growth in 2013 is lower than the growth target of 5.5%,it’s still higher
than in 2012 (5.25% ) and has signal of recovery.
- In 2013, GDP growth reached 5.42%, made economic scale reach nearly 176
billion U.S. dollars and per capita income is about $ 1,960. GDP is expected to
increase by 5.8% in 2014 and 6% in 2015. The average growth of 3 year from
2011 to 2013 has increased by 5.6% / year, but it is still lower than the growth (7.2%
) in the period 2006-2010
In the increase 5.42% of the whole economy:
- The agriculture, forestry and fisheries department increased by 2.67%
(approximated to the increase of last year) and contributed 0.48%
- The industry and construction department rose 5.43%,( lower than the growth
rate of 5,75% in previous year),and contributed 2.09%
- The service department rose 6.56% (higher than the growth rate of 5.9% in 2012) ,
contributed 2 85%.
b. The trend in each sector:
• Primary sector:

+ TREND:
- Proportion of Agriculture fluctuated from 2005 to 2010 but in overall, it slightly
increased, accounting for 71.46% in 2005 and 75.86% in 2010.
- Proportion of Forest slightly decreased from 3.70% in 2005 to 2.63% in 2010.
- Proportion of Fishery was unstable and decreased from 24.84% in 2005 to 21.51% in
2010.
+ CONCLUSION:
- Proportion of Agriculture increased but that of Fishery greatly decreased by 3.33%
=> illogical.
- In terms of Forest, though we have potential development conditions, proportion of
Forest took the lowest spot and decreased overtime.
- For Fisheries, growth rate seemed not as enormous as the 2001 – 2007 period.
• Secondary sector:
+ TREND:
- Proportion of Mining industry decreased from 11.2% in 2005 to 7.3% in 2012.
- Proportion of Processing industry increased from 82.8% in 2005 to 87.6% in 2012.
+ CONCLUSION:
Unlike the previous period, during this period, the industry has made positive changes. The
structure of the mining sector decreased, thereby solving the risk of resource depletion in the
future. Group content industries need high-tech techniques such as process technology,
manufacturing increased.
• Tertiary sector:
+ TREND: Nearly all proportion of services increased slightly from 2000 to 2009, except :
Transport, Postal service, Tourism; Sport, Culture and Activities of the organizations.
+ CONCLUSION:
The new services such as securities, maid service, home and business of all kinds of
different services associated with the market economy (such as consulting, auditing,
accounting, market research, ) is becoming more common and contribute to the dynamic
diversity of the service sector, regardless of the proportion of this sector is quite low.
At the same time, the old service occupied large proportion of centralized economic system

as state management is declining relatively.
IV. The strategy about s tructural change in Vietnam’s GDP by sectors from 2011 to
2015:
1. The general objectives:
The goal of economic restructuring in the period 2011 - 2015 is to reduce the
proportion in agriculture, forestry-fisheries, increase the proportion of group-
building industry and keep the proportion of industries services, promoting
industrialization and modernization, to 2020, VN will basically become an industrialized
country towards modernization:
- Develop Agriculture in the direction of modernly urban agriculture , improve
productivity , quality , efficiency , stability and sustainability ; actively respond to
climate change , prevent natural disasters and epidemics . Striving value growth in
agriculture, forestry and fisheries average period 2011 - 2015 will be over 6 % / year ,
increasing the value of 5 % / year, contributing to promote economic restructuring ,
transformation of economic growth pattern of the city.
- Restructure the agricultural economy ; rural economy and restructure plants and
animals as planned; form and develop the seed production of high quality , high-tech
agricultural zones ; promote the application of scientific and technical advances and new
technologies , especially biotechnology to breeding , raise productivity , quality ,
hygiene and food safety and competitiveness of agricultural products.
2. Assessment of changing process:
• Firstly, till the end of 2013,even though the proportion of agriculture, forestry and
fishery in GDP is lower than in the base year(2010t), it is still higher than the target
set. This proportion of Vietnam’s agriculture is high compared with other countries (ranked
3rd/8 in ASEAN , 9th/33 in Asia, 32nd/142 in the world). There are some reasons lead to
this situation. Vietnam stem from an agricultural country, more than 70% of population live
in rural areas, nearly half of employees are working in agriculture, forestry and fishery.
Agriculture, farmers and rural areas play an important role in the whole economy and they
18.4
43.3

38.3
Implemented ll 2013
Target
2010
Services
Industry,
construcon
Agriculture,
forestry, !shery
are considered as the "platform" of Vietnam’s economy. Therefore, the reduction in the
proportion of agriculture, forestry and fishery in GDP is not easy to happened. When other
sectors of the economy were facing with difficulty, especially over the past few years, this
sector has contributed positively to restraining inflation, curbing trade deficit and resolving
unemployment. Although Vietnam has entered the period of accelerating industrialization,
modernization and is striving for achieving the objective in 2020 to become an
industrialized country in a modern direction, we still need to consider the modernization of
agriculture and rural development as the prime importance task. We are trying to enhance
the productivity, the quality of labour working in this sector and concomitantly to cut down
labour working in agricultural in order to increase labour working in industry, construction
and services.
• Secondly, although the proportion of industry and construction in GDP in 2013 is a bit
higher than in 2010, it’s still quite far from the target set for 2015. Because of the
recession and depression in recent years, the growth rate of GDP is creasing slowly
(increased by 6.68% in 2011,5.75% in 2012, 6 months in 2013 increased by 5.18%).
Therefore, this proportion had dropped. Beside the difficulties in both input and output, the
retardation in supporting industry and the dependence on outsourcing input make Vietnam’s
industry have weak competitiveness with foreign industry. Technological barriers are big
obstacles of Vietnam’s industry and construction.
• Thirdly, the proportion of service sector in GDP has fallen in the past 4 years.
Although this proportion in 2013 was showing signs of relief was lower than, it has

prospect of achieving and exceeding the target set for 2015. Noteworthy that the services
sector have had the highest growth rate out of 3 sectors for recent many years and higher
than overall growth (in period of 7 years from 2006 to 2012, GDP of whole economy rose
6.15% / year, agriculture, forestry-fishery increased by 3, 47% / year, industry and
construction increased by 6.33% / year, while services increased by 7.27% / year). In the
first 6 months of 2013, the service sector has increased by 5.92% - the highest growth rate
out of three sectors; the proportion services in GDP reached 43.12%, was higher than the
previous year. However, there are four problems in the service sector. The proportion of this
sector in GDP of Vietnam is still low compared with other countries in the world(ranked
5th/8 in the ASEAN, 26th/40 in Asia and 123rd/150 in the world. Some spearhead sector’s
share accounted low percentages such as the scientific and technological sector accounted
for only 1.15%; financial activities, banking, insurance accounted for only 4.04%.
Productivity of the service sector was much lower than the industry and construction.
Professionalism of labour working in this sector is low, labour lack of experiences and
skills.
• According to the ADB report, Vietnam's GDP growth is forecasted to increase slightly to
5.6% in 2014 and continuously increase to 5.8% in 2015.
3. Oriented solutions:
a. Agriculture:
• Building suitable economic forms for Agriculture
• Implemented a number of policies to promote agricultural development
phase 2011 - 2020: investment policy, credit, markets, land,…
• Protect the ecological environment
b. Industry:
• Focusing on the industry has the potential to compete in future
• Attract foreign investment
• Implementing technology import policy.
c. Service:
• Diversification of services
• Improving the quality and scale of tourism.

V. CONCLUSION:
Gross Domestic Product is good for an economy measure. It is one of the important
economic variables of the national economy. Although it’s said that " GDP is an imperfect
indicator, but the analysis of the structure of GDP is still essential. GDP is expressed in many
different forms : by sector , economic sectors , by regions However, the structure of GDP
by economic sector is the most important. It directly reflects the development of work forces,
productivity , science and technology, and the social division of labor . The restructuring
GDP reflects the trend of industrialization and the quality of the development process . It is
the basic problem and the core of the process of industrialization and modernization of
Vietnam to escape poverty and backwardness . Especially, in the economy of international
integration and when Vietnam became a member of the WTO, evaluating and restructuring
GDP by sectors reasonably will help Vietnam integrate active and victory