Budget deficit expected to be about 3.8% of GDP in the 2022-2024 period

It is expected that public debt by 2024 will be about 43-44% of GDP. Source: Internet

Increase state revenue, thoroughly save recurrent expenses, save resources for pandemic prevention

According to the Ministry of Finance, in the three years from 2022 to 2024, it was forecast that the regional and global environment will be complicated, with many uncertainties: public debt and global private debt increase, risks in the international financial and monetary markets increase; especially the serious impact of the Covid-19 pandemic on world economic growth, creating socio-political risks, financial-monetary balance.

For Vietnam, the advantage is still that the political situation is stable, the macro balances are ensured, the investment environment is improved, creating confidence for the business community and people, becoming a destination for foreign investors.

However, the Covid-19 pandemic has been creating more difficulties and challenges for all aspects of socio-economic life, continuing to put great pressure on Vietnam's revenue, expenditure and state budget balance in the 2022-2024 period.

Besides that, the internal weaknesses of the economy have not been effectively handled; productivity, quality, efficiency, low competitiveness, high economic openness; the level of participation in global and regional supply chains and the ability to access the digital economy and digital society is still limited.

In that context, the goal of the 2022-2024 financial-state budget plan is to mobilize, allocate and effectively use resources to serve socio-economic development goals following the orientation of the 13th Party Congress; continue to restructure the state budget and public debt, ensure the leading role of the central budget, promote the initiative of ministries, sectors and localities, contribute to stabilizing the macro-economy, promoting growth and international integration.

Along with that, increasing state budget revenue, thoroughly reducing recurrent expenditures to save resources for pandemic prevention, solving social security issues, ensuring national defense and security, implementing wage reform and increasing investment and development spending; only spend the state budget within the economy's ability and only borrow within its debt repayment capacity, maintaining the safety and sustainability of national financial resources; tighten financial - budget discipline.

Public debt by 2024 is expected to be around 43 to 44% of GDP

It is expected that the state budget revenue and expenditure balance framework for the three years from 2022-2024 will reach about VND4.65 trillion in terms of state budget revenue; the average mobilization rate into the state budget is about 15.1% of GDP (from taxes and fees nearly 13%). Continuing to restructure revenue, the proportion of domestic revenue by 2024 will reach nearly 85% of total state budget revenue.

The Ministry of Finance plans to spend about VND5.8 trillion in this period. However, the Ministry of Finance also determined that the Covid-19 pandemic has been creating challenges for the 3rd medium-term state budget plan 2022-2024.

Regarding the state budget deficit and public debt, the average state budget deficit rate in 2022-2024 is about 3.8% of GDP. Public debt by 2024 will be about 43-44% of GDP.

To achieve the expected goal, a number of proposals and solutions have been set by the Ministry of Finance. Accordingly, the first solution is to focus on perfecting the financial legal system, accounting and auditing regimes for entities in the economy, overcoming current shortcomings and inadequacies, mobilizing maximum multiple resources; promoting decentralization, and the requirement to improve the sense of responsibility, publicity and transparency.

In addition, continuing to perfect the revenue collection system to ensure transparency, fairness and feasibility, in line with development trends and international practices.

Along with that, implementing solutions to support the economy to cope with the Covid-19 pandemic, natural disasters, storms and floods, ensure social security, restore economic development: exemption, reduction, extension of payments taxes, fees and charges for sectors, fields and subjects seriously affected by the pandemic; accelerate disbursement of public investment capital, remove difficulties for production and business, and promote economic growth; proactively have solutions on resources for pandemic prevention and control and support people and workers in difficulty; timely support for disaster prevention and recovery.

The Ministry of Finance also determined to strengthen financial and budget management and administration in association with the priorities of the economy; synchronously and effectively coordinate fiscal policies with monetary, investment and other policies to control inflation and ensure balances of the economy.

At the same time, enhance the efficiency of management, allocation and use of financial - state budget resources in association with perfecting the decentralization mechanism. For example, continuing to restructure budget expenditure towards sustainability, strengthening public investment management, renovating the mechanism of recurrent expenditure allocation to agencies and units associated with the results of task performance, reviewing the maintenance, management, and use of off-budget state financial funds.

In particular, strictly control overspending and public debt; through the principle that loans to offset state budget deficits can only be used for development investment; only spend within the economy's ability and only borrow within the economy's ability to repay.