A view of the Cat Linh - Ha Dong rail route, which is funded with Chinese capital, in Hanoi (Photo: VNA) Hanoi (VNA) – Total foreign-sourced capital forprojects will gradually decline as from 2018, when Vietnam will completelygraduate from official development assistance (ODA), leading to more prudentconsideration of projects using less preferential loans, according to PrimeMinister Nguyen Xuan Phuc.
The Government leader made a written answer to aquery of National Assembly deputy Hoang Quang Ham, who is also a member of theNational Assembly’s Committee for Financial and Budgetary Affairs.
PM Phuc noted that under the medium-term publicinvestment plan for 2016-2020, total medium-term investment capital sourcedfrom the State budget is 2,000 trillion VND in maximum. Of the sum, 300trillion VND is foreign capital allocated from the central budget, including abackup worth 30 trillion VND.
The medium-term foreign capital of 270 trillionVND basically meets the actual disbursement demand of the projects listed inthe medium-term plan.
Additionally, to make use of concessional loanssuch as those from the International Development Association (IDA) and theAsian Development Fund (ADF) before Vietnam completely graduates from ODAbecause it already became a middle-income country, the Ministry of Planning andInvestment obtained the PM approval to negotiate and sign some new projectagreements in 2016 and 2017 with an estimated disbursable capital of 29trillion VND, which matches the backup of 30 trillion VND in the medium-term plan.
However, some unexpected problems arose such asadjustment to total investment of some ongoing projects and changes in someprojects’ financial mechanisms.
Therefore, it is necessary to review themedium-term public investment plan for 2016-2020 so as not to affect theprogress and effectiveness of projects and Vietnam’s relations with developmentpartners and sponsors, PM Phuc said.
Regarding the growth slowdown in the firstquarter compared to the fourth quarter of the previous year, the PM said it isa normal phenomenon considering the fact that the long Lunar New Year (Tet) holidayand traditional spring festivals in Q1 impact production and businessactivities. Meanwhile, in Q4, enterprises often augment production and businessactivities to serve soaring Tet demand and meet their annual targets.
The PM pointed out that GDP growth usually gainsspeed in the following quarters, noting that international organisations inVietnam also recognised that this situation reflects the seasonal characteristicof economic growth in a year. Data show that GDP value in Q1 usually accountsfor about 18 percent of the total annual GDP, Q2 24 percent, Q3 26 percent, andQ4 32 percent. -VNA
VNA
