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Banking & Finance

NA adopts budget estimates for 2018

Released at: 20:25, 13/11/2017

NA adopts budget estimates for 2018

Photo: VGP

Budget deficit set at 3.7% of GDP, or $9 billion.

by Quang Huy

The budget deficit has been set at 3.7 per cent of GDP for 2018, equal to VND204 trillion ($9 billion), with a majority of National Assembly (NA) delegates voting in favor of the associated resolution on November 13.

Total budget collections are to be VND1,319 trillion ($58 billion) while total budget expenditure is VND1,523 trillion ($67 billion).

The deficit target is higher than the 3.5 per cent of GDP set for 2017 but lower than the 5 per cent ceiling it has been kept at in recent years. Actual results in 2014 and 2015 were 6.33 per cent and 6.11 per cent, respectively.

The State budget will borrow an estimated total of VND363.3 trillion ($16 billion) to make up for the shortfall and repay debts, according to the resolution.

Lawmakers also approved a 7 per cent pay rise for workers in the public sector, to VND1.39 million ($61.2) a month from July next year from the current VND1.3 million ($57.2), with the government asked to continue streamlining administrative organizations and improving their operational efficiency.

The government must study amendments to several tax regulations to ensure collections while contributing to tax reform, creating favorable conditions for businesses and preventing tax fraud, promoting the raising of capital from private and foreign sectors for development investment, and completing the legal framework for public-private partnerships and creating conditions for them to participate in developing infrastructure, especially in the agriculture and tourism sectors.

Government bond issuances in 2018 are to not exceed VND50 trillion ($2.2 billion). The NA also asked the government to strictly follow the 2016-20 public investment plan under NA Resolution No. 26 in 2016.

2018 socioeconomic targets

The NA last week passed a resolution on the socioeconomic development plan for 2018, with GDP growth to remain the same as 2017’s target of 6.5-6.7 per cent. Exports are to increase by 7-8 per cent, with the trade deficit to stay below 3 per cent of total export revenue.

The consumer price index (CPI) is to be maintained at a monthly average of 4 per cent, while total investment for social development will account for 33-34 per cent of GDP.

The rate of poor households according to the “multi-dimensional poverty line” will be reduced by 1-3 per cent, while the unemployment rate in urban areas will be less than 4 per cent. As much as 85.2 per cent of the population will be covered by health insurance; a modest rise from the 82.1 per cent recorded as at June this year. The ratio of trained workers is expected to reach 58-60 per cent of the country’s workforce.

Environmental targets include ensuring 88 per cent of all manufacturing zones and industrial parks are outfitted with up-to-standard water treatment facilities, while forest coverage is to be pushed up to 41.6 per cent.

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