Vietnam economic structure in 2025 - Forecast by ARIMA model

Abstract

Vietnam's economy, over the past 30 years, has gained great achievements, rapidly transforming Vietnam from one of the poorest countries in the world to a low-middle-income country. In 2020, although Vietnam's economy was heavily affected by the Covid-19 pandemic, natural disasters, the average economic growth rate in the five years 2016-2020 is still among the fastest-growing countries in the region and the world. The economic structure has changed with a plunge in the proportion of agriculture, forestry and fishery sector along with the increasing proportion of the service sector. This paper uses the ARIMA model to forecast the economic structure of Vietnam in 2025. The research data is the production value of the agriculture, forestry and fishery sector; the technology and construction sector and the service sector from 1987 to 2019 do not include the value of the product tax with the subtraction of product subsidies area. The steps to perform the forecast include: checking the stationary of the time series, analyzing the correlation diagram, estimating the ARIMA model, testing the hypotheses and finally forecasting the value in the year 2025 of economic sectors. The forecast results show that from 2020 to 2025, the economic structure has a strong shift from the agriculture, forestry and fishery sector along with a part of the industrial and construction sector to the service sector. Specifically, the proportion of the agriculture, forestry and fishery sector will decrease from 16% in 2019 to about 12% in 2025. The proportion of the industrial and construction sector reduces from 38% in 2019 to 36% in 2025. The service sector will increase its proportion from 46% in 2019 to 52% in 2025. Research results contribute to a quantitative basis in policy enactment and implementation at the macro and micro levels.