Macro-Econometric Model for Medium-Term Socio-Economic Development Planning in Vietnam. Part 1: Structure of the Model

Abstract

Vietnam builds the market economy from the planned economy, in which development plans, especially the medium-term socioeconomic development plans, were determined by the leading economic management tools. Currently, the development plans remain the important tools of economic management. However, the contents and methodologies for development planning have changed considerably. The plans have been built according to the direction of the market and consider macroeconomic forecasts as the most important input for planning. The purpose of this paper is to briefl y present the structure of a macro-econometric model for medium-term socioeconomic development planning in Vietnam. The model is based on the main ideas of the forecasting procedures and the system of forecast models for strategic planning in the Russian Federation. Furthermore, the model utilizes the experience of macro-econometric models in other countries. This model is based on the approaches of supply and demand, and is organized into blocks that have a close relationship to combine forecasts from the built model and using judgmental methods in a favourable way. The model can fully forecast the needs of socioeconomic development planning. It is also used to build forecast scenarios and to assess the impact of shocks and economic policies.

Macro-Econometric Model for Medium-Term Socio-Economic Development Planning in Vietnam. Part 2: Application of the Model

“…The foreign and domestic factors of the Vietnam's model in [2] are represented by exogenous variables demonstrated in Table 1. The variables are used to establish the conditions for creating forecast scenarios.…”

“…I presented the issues that the Vietnam's model can forecast in the previous work [2]. It should be noted that this model can generate the systematic, comprehensive and detailed forecasts for five-year and annual socio-economic development planning in Vietnam.…”

“…Making forecasts using the Vietnam's model is an iterative process. It starts with the Production and GDP block [2] where gross domestic product (GDP) of whole economy as well as of the pri- mary, secondary and tertiary industries are forecasted in accordance with the demand approach. Then, it follows the next blocks in the order as indicated in [2].…”

“…Within the framework of the state-level research cooperation project in the form of a protocol between the Governments of Vietnam and the Russian Federation entitled «Research on medium-term socio-economic forecasting methodologies in the Russian Federation and its applicability to Vietnam» [1], a macro econometric model for medium-term (five-year) socio-economic development planning in Vietnam (called the Vietnam's model) was built. I have introduced the goals, requirements and structure of this model in [2].…”

“…assessed. Continuing the research presented in the work [2], this paper will introduce key applications of the Vietnam's model and evaluate the model's forecast quality by comparing the model's ex-ante forecasts using two established forecast scenarios with actual statistical data for 2016 and 2017. I created two forecast scenarios based on two different sets of assumptions determined in the same way as in 2 [3].…”