2010 budget deficit may be lower 5.6% GDP?

Many members of the Vietnamese National Assembly’s Finance and Budget Committee proposed to continue lowering the 2010 budget deficit down to below 5.6% of GDP, the committee head Phung Quoc Hien said on Friday.

In fact, the real budget gap of 5.6% GDP (equaling to 109.460 trillion dong) was lower 0.6% GDP (10.240 trillion dong) than the full year target and 0.2% GDP (3.640 trillion dong) compared to the National Assembly’s requirement.

In the Eighth Term National Assembly last year end, the government had estimated 2010 budgetary revenue at 528.100 trillion dong, up 12.7% (58.6 trillion dong) against estimate.

The government had planned to use about 10 trillion dong for debt payment and spend 3.6 trillion dong to bring down the budget gap to 5.95% GDP.

Even, the National Standing Committee had proposed to use a part of excess in central budget revenues to reduce the deficit down to 5.8% GDP, helping ensure the national finance security in next years.

Till last December 31, total budget revenues reached 559.170 trillion dong, surpassing 21.2% (or 97.670 trillion dong) against the year plan and increasing 31.070 trillion dong over the NA’s reported figure.

In details, the central budget revenues exceeded 48.584 trillion dong, so policy makers expected to narrow the budget gap to 4.5% GDP by 2015.

But others proposed a figure of below 5.5% GDP for 2010 in the context of non-solid finance security, meaning that they are proposing the state to budget money from revenues to offset deficit.

Though the government recommended a budget deficit of 5.5% GDP for 2011, the figure of 5.3% GDP is the final target “decided” in the resolution of state budget plan for this year.

Under the resolution, total budget revenues for 2011 are targeted at 595 trillion dong, or 26.2% GDP. In addition to 10 trillion dong transferred from 2010 revenues, the total will be 605 trillion dong. Total budget expenditure is expected at 725.600 trillion dong.

The latest source from Minister of Finance Vu Van Ninh at the conference on Feb 17 said that the government expected to reduce the 2011 budget gap to below 5% and increase the budget revenues to over 7%. – Vietbiz24

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