Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - The Ministry of Finance forecast a budgetoverspending at 5-5.1 percent of gross domestic product (GDP) this year, about1.5-1.6 percentage points higher than the Government’s plan due to the impactsof the COVID-19 pandemic.
The State budget was under the pressure of increased spending on anti-pandemiceffort and assistance to those who were suffering due to the pandemic.
Statistics showed that a sum of 9.5 trillion VND (400 million USD) from bothcentral and local budgets was spent on purchasing medical equipment andsupplies to prevent and fight the pandemic. This expense could continue toincrease.
Some 6.7 trillion VND was spent on providing allowances to forces participatingin the fight against COVID-19, for meals for people who were kept isolated andundergoing medical treatment during the isolation period.
The State budget also spent 36 trillion VND to implement the Government’sresolution on providing support in cash to six groups who were suffering fromthe pandemic to ensure minimum living standards.
Despite a huge need for spending, State budget revenue was predicted to dropsignificantly as the COVID-19 pandemic caused a number of sectors, fromproduction to trade and investment, to fall into difficulties.
The Government was also planning to issue policies to cut taxes and fees forbusinesses to help them overcome the difficult time, which also caused drops inbudget revenue in the short-term.
At the same time, tumbling crude oil prices coupled with slow restructuring andprivatisation of State-owned enterprises weighed on budget revenue.
The revenue from SOEs’ restructuring and privatisation was planned at 45trillion VND this year. However, after four months, no collection has beenrecorded.
According to Minister of Finance Dinh Tien Dung, if the pandemic eased in thesecond quarter of this year, the best scenario, GDP would expand 5.3 percent,1.5 percentage points lower than the Government’s plan. In this scenario, crudeoil prices were projected to average 35 USD per barrel and the plan ofprivatising SOEs failed, the State budget revenue was estimated to drop by 140-150trillion VND.
Bigger reductions in the State budget revenue were projected if GDP growth wasbelow five percent as per the forecasts of several international organisations.
To ensure adequate sources for spending amid the COVID-19 pandemic, theGovernment asked ministries, agencies and local authorities to cut at least 30 percentof expenses for conferences and domestic business trips and 50 percent forinternational trips, which could help save 600-700 billion VND.
The ministry was also negotiating with donors for the most preferential lendingterms. It was estimated that loans with low rates from international organisationscould be around 1 billion USD./.
The State budget was under the pressure of increased spending on anti-pandemiceffort and assistance to those who were suffering due to the pandemic.
Statistics showed that a sum of 9.5 trillion VND (400 million USD) from bothcentral and local budgets was spent on purchasing medical equipment andsupplies to prevent and fight the pandemic. This expense could continue toincrease.
Some 6.7 trillion VND was spent on providing allowances to forces participatingin the fight against COVID-19, for meals for people who were kept isolated andundergoing medical treatment during the isolation period.
The State budget also spent 36 trillion VND to implement the Government’sresolution on providing support in cash to six groups who were suffering fromthe pandemic to ensure minimum living standards.
Despite a huge need for spending, State budget revenue was predicted to dropsignificantly as the COVID-19 pandemic caused a number of sectors, fromproduction to trade and investment, to fall into difficulties.
The Government was also planning to issue policies to cut taxes and fees forbusinesses to help them overcome the difficult time, which also caused drops inbudget revenue in the short-term.
At the same time, tumbling crude oil prices coupled with slow restructuring andprivatisation of State-owned enterprises weighed on budget revenue.
The revenue from SOEs’ restructuring and privatisation was planned at 45trillion VND this year. However, after four months, no collection has beenrecorded.
According to Minister of Finance Dinh Tien Dung, if the pandemic eased in thesecond quarter of this year, the best scenario, GDP would expand 5.3 percent,1.5 percentage points lower than the Government’s plan. In this scenario, crudeoil prices were projected to average 35 USD per barrel and the plan ofprivatising SOEs failed, the State budget revenue was estimated to drop by 140-150trillion VND.
Bigger reductions in the State budget revenue were projected if GDP growth wasbelow five percent as per the forecasts of several international organisations.
To ensure adequate sources for spending amid the COVID-19 pandemic, theGovernment asked ministries, agencies and local authorities to cut at least 30 percentof expenses for conferences and domestic business trips and 50 percent forinternational trips, which could help save 600-700 billion VND.
The ministry was also negotiating with donors for the most preferential lendingterms. It was estimated that loans with low rates from international organisationscould be around 1 billion USD./.
VNA
