Politburo resolution restructures State budget, manages public debt

Hanoi (VNA) – Party General Secretary Nguyen Phu Trong has signed a Politburo resolution on policies and measures to restructure the State budget and manage public debts to ensure the safety and stability of the national finance, towards keeping macro-economy stability.

Resolution 07-NQ/TW, issued on November 18, targets strengthening the mobilisation, management, distribution and effective use of financial resources, while boosting the socio-economic growth.

It aims to ensure social security, enhance welfare, protect the environment, respond to climate change, safeguard defence and security and promote international integration.

Specific goals set in the resolution include the contribution of 20-21 percent of GDP to State budget on average in 2016-2020, striving total budget collection rising by 1.65 times over the amount in 2011-2015.

Domestic collection is expected to account for 84-85 percent of State budget income, with 14-16 percent coming from crude oil and import-export activities.

Meanwhile, central budget collection is set to reach 60-65 percent, according to the resolution, which also sets that after 2020, the State budget collection will stay at a stable and reasonable ratio compared to GDP.

It aims to keep the State budget expenditure in 2016-2020 at 24-25 percent of GDP on average, with about 25-26 percent of the total sum to be allocated to development investment and up to 64 percent to regular spending.

After 2020, the expenditure scale will be defined to suit socio-economic development targets and the capacity of resource balance to ensure public debt safety.

The resolution also focuses on maintaining national financial security and positive budget balance and reducing State budget overspending to below 4 percent of GDP in 2020 and about 3 percent in 2030, aiming at a balanced State budget collection and spending.

At the same time, the yearly public debt in the 2016-2020 period will be reined in at maximum 65 percent of GDP, while Government debts and national foreign debts will not exceed 55 percent and 50 percent of GDP.

By 2030, public debts, Government debts, and national foreign debts would stay below 60 percent, 50 percent, and 45 percent of GDP, respectively.

To that end, the resolution works out six major solutions, including creating a favourable environment and motivation for socio-economic development, generating sustainable income sources for the State budget, along with restructuring budget collection and spending, strengthening public debt management, and ensuring safety and stability of the national finance.

It also highlights the need to restructure and enhance the effectiveness of public investment, as well as tightening disciplines and enhancing the efficiency and enforcement of State management in finance-budget and public debts.

On November 5, Party General Secretary Nguyen Phu Trong signed into issuance Resolution 06-NQ-TW on the goals and guidelines for the effective implementation of international economic integration and maintenance of socio-economic stability in the context of Vietnam joining new generation free trade agreements.-VNA