Illustrative image (Source: VNA) The report features an overall picture on the state budget inthis year, with estimated revenue of more than 1.62 quadrillion VND (70.46billion USD), which is up by 0.4% compared to the realised figure estimated for2022, according to Nhan Dan (People) Newspaper.
Of which, it will be over 1.334 quadrillion VND (58 billion USD)from domestic revenue; and 42 trillion VND (1.83 billion USD) from crude oilexports – based on estimations that the domestically exploited output will benearly eight million tonnes with an average price of around 70 USD per barrel;239 trillion VND (10.39 billion USD) from export and import activities; and 5.5trillion VND (239.1 million USD) from foreign assistance.
It is also predicted that total central budget revenue will beabout 863.5 trillion VND (37.52 billion USD) this year, while total localbudget revenue will stand at 757.2 trillion VND (32.92 billion USD).
Meanwhile, it has been estimated that Vietnam’s total statebudget spending will be more than 2.076 quadrillion VND (90.26 billion USD) –up 16.3% compared to the 2022 expenditure estimations.
Of the figure, spending for development investment will accountfor 726.7 trillion VND (31.6 billion USD), and recurrent expenditures will bemore than 1.172 trillion VND (50.96 billion USD). Other expenditures will alsoinclude debt service (102.9 trillion VND or 4.47 billion USD); spending forsalary reforms, retired salaries, and adjustments of some schemes of subsidies,allowances, and social security pertaining to basic salaries (12.5 trillion VNDor 543.47 million USD); and other sums of spending (61.8 trillion VND or 2.68billion USD).
According to the MoF, the state budget overspending in 2023 willlikely sit at 455.5 trillion VND (19.8 billion USD), which will be equivalentto 4.42% of GDP. The central budget deficit will reach 430.5 trillion VND (morethan 18.7 billion USD) or 4.18% of GDP; and local budget overspending willtouch about 25 trillion VND (over 1.08 billion USD) or 0.24% of GDP.
Solutions
In order to make the budget landscape this year possible, thegovernment will carry out a series of solutions.
Specifically, “the government will focus on administeringappropriate and effective fiscal policies, promptly responding to complicatedfluctuations of domestic and foreign situations, ensuring the objectives ofmaintaining macroeconomic stability, controlling inflation, promoting growth,and ensuring major balances of the economy,” said Minister of Finance Ho DucPhoc.
“In addition, we will continue to perfect the state budgetcollection system, strengthen revenue management, and restructure revenuesources so as to ensure sustainability. We will also have to study, amend,supplement, and perfect the tax administration institution to ensure the accurate,sufficient and timely collection of taxes, fees, charges and other revenue intothe state budget,” Phoc said. “We will also tighten financial discipline,strengthen the responsibility of the head of all units in the management anduse of finance and budget. We will also administer state budget expendituresclosely, thriftily and efficiently, while cutting expenses that are not reallynecessary. We will also have to thoroughly save regular expenses.”
In this year, the government will also thoroughly direct thepractice of thrift and fight against waste; strengthen inspection, examination,and handling of responsibilities of organisations and individuals in theobservance of regulations on thrift practice and the fight against waste, whileensuring the effective use of the state budget.
“The government will also strictly control the state budgetdeficit, the local budget overspending, and the debt level of the local budget.It will also continue strengthening the inspection and inspection of theborrowing and use of loan capital and debt repayment. In addition, thegovernment will also actively implement solutions to restructure public debt inaccordance with the Law on Public Debt Management,” Phoc stressed.
Positive landscape
In 2022, the country’s state budget picture enjoyed a bigsurplus, with enterprises in general gradually riding out the storms tocontinue growing. Specifically, the total state budget fetched a surplus of9.67 billion USD.
Total budget expenditure is estimated to be more than 67.93billion USD – tantamount to 87.5% of the year’s estimations and up 8.1% year onyear.
The budget expenditures ensured demands for socio-economicdevelopment, national defence and security, state management, payment of debtsthat were due, support for people attacked by the health crisis, andrestoration of production activities in sectors hit by natural disasters andCOVID-19, according to a government report on the issue released two monthsago.
Meanwhile, the state budget revenue was estimated to reach asmuch as 77.6 billion USD, equivalent to 126.4% of the year’s estimations and up13.8% year on year. All types of revenues registered a year-on-year expansion,mirroring recovery in almost all sectors in the domestic economy.
Domestic revenue stood firmly at 61.8 billion USD, which wasequal to 120.8% of the year’s estimations and up 9% year on year.
What is more, revenues from export-import activities last yearsat at 12.17 billion USD, equivalent to 140.7% of the year’s estimations and up29.7% compared to the same period last year.
According to the MoF, it has been calculated that last year, thegovernment might have loans worth total 29.3 billion USD. This consisted ofloans for central budget balance of 28.1 billion USD, of which borrowing tooffset the central budget deficit might be a maximum of 19.6 billion USD,borrowing to repay the principal might not exceed 8.52 billion USD, andon-lending might be 1.16 billion USD.
Such loans were reported to come from government bond issuanceinstruments, with the average issuance term being likely less than nine years;from official development assistance loans and foreign preferential loans; andfrom other lawful financial sources or from issuance of government bondsdirectly to the State Bank of Vietnam.
Also, according to the MoF, the government’s debt repayment lastyear is estimated to have stayed at around 14.6 billion USD. Of which, thegovernment’s direct debt payment was a maximum of 13 billion USD and therepayment of on-lending projects sat at 1.56 billion USD.
As for the loan and repayment plan of localities, borrowing fromthe government’s foreign loans and other domestic loans was reported to stay atabout 1.24 billion USD. Localities’ debt repayment was worth 265.7 billion USD,including principal payment of 158.1 million USD and interest payment of 107.56million USD.
It has also been estimated that Vietnam’s public debt at the endof 2022 might stood at 43-44% of GDP; the government debt might be 40-41% ofGDP; and the nation’s foreign debts might stand at 40-41%.
Meanwhile, the government’s direct debt repayment obligation for2023 will be as much as 18-19% of total state budget revenue – lower than theNA’s permissible limit of 25%. Also in this year, the public debt for this yearwill hover at around over 40 per cent of GDP, meaning the national financialsafety will still be maintained as it was last year./.
VNA
