PART II MACRO AND INTERNATIONAL
CONOMICS - KINH TẾ VĨ MÔ VÀ KINH TẾ
QUỐC TẾ
34. Measures of Economic Performance: There is More Than
Meets The Eye!
Viet Nam's GDP growth rate is expected to be about 7% this year. Gross
domestic product is the annual market value of all final goods and services
produced in the economy. The figure of 7% refers to growth in inflation-
adjusted* or real GDP. GDP per capita is very closely related to average
annual income. While GDP is a good overall measure of the economy's
performance, two important sets of caveats need to be kept in mind.
First, a positive GDP growth does not mean that all sectors of the
economy grow equally; some sectors may in fact be declining. Different
regions of the country could be growing at different rates. The incomes of
certain groups could be growing faster than 7%, while some incomes may
be stagnant. Also, GDP calculations do not take into account the "bads"
that are produced in conjunction with goods, such as increased pollution
and traffic congestion.
Second, GDP is not the only measure of macroeconomic performance.
Inflation and unemployment rates** are other major indicators. These
indicators are interrelated: an improvement in one measure may be
accompanied by a deterioration in another. For example, China in the 90's
experienced an acceleration in GDP growth but higher inflation as well.
Some macroeconomic indicators in Vietnam have improved substantially
in recent years. Vietnam was one of the fastest growing economies in the
90's. It also saw a dramatic decline in inflation (see chart).
