The COVID-19 pandemic will continue to weigh on socio-economic development and State budget in 2021 and the years that follow, Minister of Finance Dinh Tien Dung said.
Dung said that what happened in 2012-13 period showed that in an economic downturn, the domestic budget collection growth rate was equivalent to just half of the GDP’s growth rate.
Domestic budget collection was projected to increase by 5.6 per cent over 2020 – a positive growth in the context of uncertainty.
If GDP this year expanded at around 2-3 per cent, GDP would average 5.8-5.9 per cent in 2016-20 period, still lower than the target of 6.5-7 per cent.
Budget revenue this year was anticipated to be VND190 trillion (US$8.2 billion) lower than the plan and for the five-year period, the revenue would be around VND150 trillion lower.
Budget deficit would be at around 3.8 per cent of GDP this year and public debt reduced to 56.8 per cent from 63.7 per cent in 2016.
The global and regional economic recovery would be significantly dependent of the capacity of containing the virus, Dung said.
In 2021, budget revenue was projected at VND1.34 quadrillion, VND170 billion lower than the plan for 2020. Budget deficit was planned at four per cent of GDP in 2021.
For the 2021-25 period, the economic growth was proposed at 6.5-7 per cent and the budget revenue to total VND7.8 quadrillion, 1.1 – 1.2 times higher than 2016-20 period.
Dũng said domestic collection was expected to account for 85-86 per cent of the budget revenue, 12.7 per cent from import and export and 1.4 per cent from crude oil.
The percentage of budget revenue from crude oil reduced from 12.7 per cent in 2011-15 period to 3.6 per cent in 2016-20.
Domestic collection was expected to expand at an average of 8 per cent per year in 2021-25 period in the context of global economic uncertainty and the impacts of the COVID-19 pandemic.
Spending for the next five-year period would total VND9.7 quadrillion, 1.3 times higher than 2016-20 period. Of the figure, VND2.75 quadrillion would be for development investment to aid the post-pandemic economic recovery,
Budget deficit was projected to average 3.7 per cent of GDP in 2021-25 period and reduce from four per cent in 2021 to 3.4 per cent in 2025.
Public debt would be planned at 47.5 per cent of GDP.
The nation’s digital economy hit US$12 billion in 2019, with the sector anticipated to record rapid growth in the coming years to reach a figure of US$43 billion by 2025.