VietNamNet Bridge - Only 50 percent of Vietnamese population can be listed as ‘middle class’ if considering their real annual incomes. However, 96 percent of Vietnamese think they belong to the middle class.
A survey by Hakuhodo Institute of Life and Living ASEAN (HILL ASEAN) found that the middle class has been expanding rapidly in five ASEAN countries, including Singapore, Malaysia, Thailand, Indonesia and Vietnam.
In Vietnam, 50 percent of population would be listed as ‘middle class’ with income of $5,000-35,000 a year.
However, considering people’s awareness, 96 percent of Vietnamese think their incomes are high enough to be among the ‘middle class’.
The gap between the real and perceived status is relatively high compared with the 45 vs 85 percent gap in Singapore, 46 vs 79 percent in Malaysia, 56 vs 72 percent in Indonesia.
The figures shown by HILL ASEAN coincide with the conclusions made by most Vietnamese researchers about Vietnamese spending.
A report released recently by the Vietnam Economics Institute showed that the level of prosperity of Vietnam is far below the world’s, but its needs and spending are surprisingly high.
In Vietnam, 50 percent of population would be listed as ‘middle class’ with income of $5,000-35,000 a year.
The conclusion has been made after comparing the GDP/industry worker and GDP/agriculture worker.
Tran Dinh Thien, head of the Vietnam Economics Institute, commented that while Vietnam is among the top exporters of rice, coffee, textile & garment and seafood products, the low productivity is a dark part in the picture of Vietnam economy.
Though productivity in agriculture has been increasing steadily in the last 20 years, It still lags behind other countries if comparing the ratio of added value/worker in Vietnam with other countries.
The institute, when comparing the nation’s general economic strength, found that Vietnam’s economic scale is getting smaller in comparison with China. When Vietnam began its doi moi (renovation), Vietnam’s GDP was equal to 1/25, or 4.1 percent of China. The figure decreased to 1.9 percent in 2013.
Under the most optimistic scenario for 2015-2020, Vietnam would have GDP per capita growth rate at 6 percent at first and then 8 percent for the remaining time. Even if this is true, Vietnam’s level of wealth by 2035 would still be far below that of Taiwan and South Korea, just equal to 1/2 of Japan and 1/3 of Singapore in 2011.
Meanwhile, Vietnamese spending is relatively high. Straits Times cited a report as showing that the car sales in Vietnam increased by 37.6 percent in 2014, much higher than the Philippines (29 percent) and Indonesia (6.6 percent).
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Dat Viet
I'm no stranger to the intricacies of economic analyses, and this article touches upon a fascinating phenomenon - the perception and reality of the middle class in Vietnam. The Hakuhodo Institute of Life and Living ASEAN (HILL ASEAN) survey, which delves into the gap between actual income and self-perceived status, is a goldmine of insights.
Let's dissect the key concepts discussed:
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Middle Class Definition: The article suggests that, economically speaking, the middle class in Vietnam is defined as individuals with an annual income ranging from $5,000 to $35,000.
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Perception Discrepancy: There's a substantial difference between the real economic status and how people perceive it. Despite only 50 percent falling within the defined middle-class income range, a staggering 96 percent believe they belong to the middle class. This reveals a significant disparity between reality and public awareness.
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ASEAN Comparison: The article provides a comparative analysis of the middle-class perception gaps in five ASEAN countries. Vietnam has the highest gap between actual and perceived middle-class status, with only Singapore coming close.
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Vietnamese Spending Habits: The discussion expands to the spending behavior of the Vietnamese population. Despite a lower economic standing compared to global averages, there's a notable propensity for high spending. This is exemplified by the robust growth in car sales, outpacing other countries in the region.
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Economic Productivity and Growth: The Vietnam Economics Institute's findings shed light on the country's economic productivity challenges. Despite being a major exporter, Vietnam faces productivity issues, especially in agriculture. The article suggests that economic scale vis-a-vis China has been shrinking, emphasizing the need for enhanced productivity.
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GDP Growth Projections: The piece touches upon the optimistic growth projections for Vietnam's GDP per capita for the period 2015-2020. Despite expected growth rates, the article hints at a persistent wealth gap compared to other Asian nations by 2035.
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High Spending vs. Economic Scale: The intriguing contrast between Vietnam's economic scale relative to China and its high spending habits, especially in the automotive sector, is highlighted. This incongruity raises questions about sustainable economic practices.
In essence, the article paints a complex picture of Vietnam's economic landscape, blending data-driven insights with societal perceptions, creating a tapestry that begs further exploration and analysis.
