The Ministry of Finance has made public detailed figures in the state budget estimate for 2021, indicating a fiscal deficit of VND343.67 trillion (US$14.82 billion) for the year, equivalent to 4% of GDP, down from an estimated deficit of 4.99. – 5.59% in 2020 (equivalent to VND319.5 – 328 trillion (US$13.78 – 14.15 billion).
|Disclosure of state budget estimate is a key step in promoting transparency and publicity of Vietnam's state budget.|
Under the budget plan, Vietnam’s state budget revenue next year is estimated at VND1,343 trillion (US$58 billion) and expenditure VND1,687 trillion (US$72.78 billion). The government is set to borrow VND608.56 trillion (US$26.3 billion).
The release of these figures came following the National Assembly’s decision to approve the state budget estimate in 2021 last month, but also a key step in promoting transparency and publicity of Vietnam’s state budget.
A major point of the budget plan it that fund allocation will be prioritized for the Covid-19 fight, recovery efforts after natural disasters, social welfare, national security and foreign affairs, while basic wage, pension and other social beneficiaries stay unchanged in 2021.
Over the years, the Vietnamese government has made improvements to ensure greater transparency of national and ministerial budget management. Specifically, Vietnam’s budget transparency score in the Open Budget Survey 2019 (OBS), the world’s only independent and fact-based research instrument, significantly increased to 38 out of the maximum 100 points, 23 points higher than the previous assessment in 2017.
The score pushed Vietnam’s ranking to 77 out of 117 countries and territories, up 14 places against 2017.
Vietnam’s budget deficit this year is estimated at VND319.5–328 trillion (US$13.78-14.15 billion), equivalent to 4.99-5.59% of GDP, significantly higher than the target set in early 2020 which is 3.44%-of-GDP.
"Such a high fiscal deficit is due to lower-than-expected state budget revenue and an increase in regular spending caused by severe Covid-19 impacts," said Minister of Finance Dinh Tien Dung in a National Assembly session in October.
This year, Vietnam’s budget revenue is estimated at VND1,320 trillion (US$57 billion), down VND189.2 trillion (US$8.16 billion) or 12.5% compared to the year's estimate and 14% against the figure recorded in 2019.
Meanwhile, state budget spending could reach VND1,680 trillion (US$72.47 billion) this year, down VND60.89 trillion (US$2.62 billion) or 3.5% against the estimate.