Vietnam recorded a state budget deficit of VND7.8 trillion (US$334.33 million) in the year to May 15, 2020, a stark contrast from a budget surplus of VN77.9 trillion (US$3.33 billion) in the same period of last year, according to the General Statistics Office (GSO). 

Data: GSO. Chart: Ngoc Mai.

As of May 15, budget revenue collection reached VND529.6 trillion (US$22.7 billion), equivalent to 35% of the year's estimate.  

Upon breaking down, domestic revenue during the period stood at VND439.9 trillion (US$18.85 billion), equivalent to 34.8% of the year's estimate. Of the sum, the state sector contributed VND52.9 trillion (US$2.26 billion), or 29.7% of the year's estimate, the FDI sector made up VND79.5 trillion (US$3.4 billion), meeting 34.8% of the plan. 

Moreover, VND82.9 trillion (US$3.55 billion) was collected from non-state industrial, commercial and service taxes, equaling 30.6% of the plan, and VND19.5 trillion (US$835.83 million) from tax on environmental protection or 28.9%. 

Revenue from import-export activities hit VND70.5 trillion (US$3.02 billion), or 33.9% of the year's estimate, and that from crude oil totaled VND18.9 trillion (US$810.12 million), meeting 53.7% of the year's plan.

Additionally, personal income tax contributed VND52.4 trillion (US$2.24 billion) to the state budget or 40.7% of the year's estimate, and land use rights VND48.5 trillion (US$2.07 billion), or 50.6% of the plan.

Data: GSO. Chart: Ngoc Mai.

Meanwhile, state budget expenditures as of April 15 totaled VND537.4 (US$23.03 billion), equivalent to 30.8% of the year's plan. Of the total, regular spending reached VND385 trillion (US$16.5 billion) or 36.4% of the plan. Capital expenditure reached VND103.8 trillion (US$4.44 billion) or 22.1%, and interest payment, VND45.6 trillion (US$1.95 billion) or 38.6%. 

In a government meeting in early April, Minister of Finance Dinh Tien Dung said in case the pandemic ends within this quarter, the country's GDP growth would come in at 5.3% and if oil prices average at US$35 per barrel, the state budget may lose VND140 – 150 trillion (US$6 – 6.43 billion). The losses would be bigger if GDP grows by less than 5%.

Dung recommended government agencies, provinces and cities reduce recurrent expenditures, especially expenses related to meetings, conferences and working trips.

The Ministry of Finance estimated fiscal deficit could increase to 5 – 5.1% of GDP, significantly higher than the target of 3.4% (excluding debt principal repayments) set in December 2019.