Individual business households include pho stall owners, small vendors at traditional markets, pig farm owners raising thousands of animals, and garden owners cultivating a variety of vegetables and fruit trees. These are the 5.2 million business household units, present everywhere and in every business field.

They are the ultimate social safety net, supporting themselves, creating jobs for the community and society, and "a source of accumulation for expanded reproduction".

However, this individual economic sector appears to have been largely forgotten.

The role of the private economic sector in the socio-economic development process in Vietnam has been affirmed as immensely significant. This role must be recognized as a driving force for development in the forthcoming period.

Individual business households are a vital component not only of the private economic sector but also of the entire national economy. This economic segment has been referred to by various names over time, such as household economy, individual economic entities, and individual production and business establishments.

Most recently, in Circular No07/2025, issued on February 13, 2025, and effective from May 1, 2025, by the Ministry of Planning and Investment, the State officially designates this economic segment as the individual economy—one of the recognized economic sectors.

Is the individual economic sector large or small? 

The Statistical Yearbook of 2023, the most recently updated edition, shows the GDP structure at current prices by economic type in 2022 as follows: State economy: 20.96 percent (page 245); non-state economy: 50 percent (page 245), of which the private enterprise sector accounts for 28 percent and the individual economic sector 22 percent; and the foreign-invested sector: 20.54 percent (page 245).

Thus, the individual economic sector accounts for 22 percent of GDP (including agriculture, forestry, and fisheries). Of this, the non-agricultural individual economic sector (excluding agriculture, forestry, and fisheries) accounts for about 11 percent.

Regarding the number of employed workers in the economy (page 165): State economy (7.9 percent); foreign-invested sector (10.0 percent); non-state economy (82.1 percent).

The number of workers in the non-agricultural individual economic sector constitutes 39 percent of the total employed workforce nationwide.

The figures affirm the position and role of the individual economic sector in the nation’s development process. This is reflected in two key groups of data: the individual economic sector holds a substantial share of the country’s GDP (22 percent), and it plays an exceptionally significant role in job creation (39 percent).

In practice, the individual economic model is merely another term for the household economy, which was enshrined in the Resolution of the 6th Party Congress in 1986. Moreover, the Resolution of the 6th Congress highly regarded this economic model in terms of its position, status, and potential.

“The household economy holds an important position with abundant potential and should be encouraged and supported for development… The income from the household economy not only contributes to improving living standards but also serves as a source of accumulation for expanded reproduction.”

Over the decades of reform, nearly 5.2 million business households have contributed significantly to the country’s development, particularly as a social welfare safety net.

However, the reality is that, to date, there have been no sufficiently robust policies or solutions to safeguard the sustainability of this individual economic model. Measures to combat smuggling across land and sea borders remain inadequate; while tax policies are still too lenient to prevent the influx of goods across borders, which severely impacts the survival of the country’s individual economic sector.

There has yet to be a strong enough policy to “encourage and support the development” of this economic model, as outlined in the Resolution of the 6th Congress nearly 40 years ago.

To build economic and social development plans for the upcoming year, or for five or 10 years ahead, reliable data reflecting the socio-economic conditions of the previous year, five years, or 10 years are always essential.

Currently, as per regulations, the General Statistics Office (GSO) only publishes quarterly and annual economic trends based on the sectoral economic structure (agriculture, forestry, and fisheries; industry and construction; services) to serve as a basis for planning socio-economic development for the subsequent period.

Meanwhile, economic trends by ownership type, however, are published incompletely in the Statistical Yearbook by GSO. 

Though somewhat delayed, the leadership of the Ministry of Planning and Investment recognized this shortfall, and, at the GSO’s proposal, issued the aforementioned Circular 07. With the current vigorous preparations, it is hoped that in 2026, GSO will publish the GDP structure by economic type alongside the GDP structure by economic sector.

Tu Giang