COVID-19 pandemic weighs on budget
The COVID-19 pandemic will continue to weigh on socio-economic development and State budget in 2021 and the years that follow, Minister of Finance Dinh Tien Dung said.
Dung said that what happened in 2012-2013 period showed that in an economic downturn, the domestic budget collection growth rate was equivalent to just half of the GDP’s growth rate. Domestic budget collection was projected to increase by 5.6% over 2020 – a positive growth in the context of uncertainty.
If GDP this year expanded at around 2-3%, GDP would average 5.8-5.9% in 2016-20 period, still lower than the target of 6.5-7%.
Budget revenue this year was anticipated to be 190 trillion (US$8.2 billion) lower than the plan and for the five-year period, the revenue would be around VND150 trillion lower.
Budget deficit would be at around 3.8% of GDP this year and public debt reduced to 56.8% from 63.7% in 2016.
The global and regional economic recovery would be significantly dependent of the capacity of containing the virus, Dung said.
In 2021, budget revenue was projected at VND1.34 quadrillion, VND170 billion lower than the plan for 2020. Budget deficit was planned at four percent of GDP in 2021.
For the 2021-2025 period, the economic growth was proposed at 6.5-7% and the budget revenue to total VND7.8 quadrillion, 1.1 – 1.2 times higher than 2016-20 period.
Dung said domestic collection was expected to account for 85-86% of the budget revenue, 12.7% from import and export and 1.4% from crude oil.
The percentage of budget revenue from crude oil reduced from 12.7% in 2011-2015 period to 3.6 percent in 2016-2020.
Domestic collection was expected to expand at an average of 8% per year in 2021-2025 period in the context of global economic uncertainty and the impacts of the COVID-19 pandemic.
Spending for the next five-year period would total VND9.7 quadrillion, 1.3 times higher than 2016-2020 period. Of the figure, VND2.75 quadrillion would be for development investment to aid the post-pandemic economic recovery,
Budget deficit was projected to average 3.7% of GDP in 2021-2025 period and reduce from four percent in 2021 to 3.4% in 2025.
Public debt would be planned at 47.5% of GDP.