According to the Government's report, Vietnam’s GDP in 2020 reached $271.2 billion, 1.4 times higher than that of 2015. GDP per capita in 2020 was $2,779, 1.3 times higher than 2015.
In this period, the state budget revenue exceeded the plan while overspending and public debt fell sharply. The Government's report to the National Assembly showed that for 2016-2020 period, the total state budget revenue reached VND 6.89 quadrillion, higher than the target of VND 6.864 quadrillion.
The revenue structure was also more sustainable, no longer relying heavily on exploitation of natural resources and minerals.
Budget expenditure had positive changes in the direction of prioritizing resources to increase investment, which accounted for 28% of the total state budget expenditure in 2016-2020 (the target set by the National Assembly is 25-26%). Recurrent expenditure reduced from 64.9% of total state budget expenditure in 2017 to less than 64% in 2020.
The debt safety indicators were strictly controlled, within the public debt ceiling limit approved by the National Assembly and gradually reduced over the years.
However, the state budget revenue structure was unsustainable. According to the National Assembly Economic Committee, revenues representing the internal strength of the economy in three important economic sectors (state-owned enterprises, FDI and private enterprises) did not meet the estimate. The increase of budget revenue mainly came from housing and land. Recurrent expenditures accounted for a high proportion, equivalent to 65.2% of the total state budget expenditures due to expenditures on social policies and ineffective downsizing of staff and reorganization of the apparatus.
Pressure for the 2021-2025 period
2021 is the first year of the socio-economic plan for the 2021-2025 period but the economy has faced an ever more stressful epidemic situation. This has raised concerns about the implementation of state budget revenue and expenditure.
In the January-July period of this year, state budget revenue still increased compared to the same period last year. However, since April, revenue has been decreasing, while the number of businesses leaving the market has increased.
Overall, compared to the 2016-2020 period, in the 2021-2025 period, state budget revenue is expected to increase by 1.2 times; recurrent expenditures to increase 1.34 times; public investment capital to increase 1.43 times; and proportion of development investment spending to be 28%-29% of the total state budget expenditures, higher than that of for the 2016-2020 period.
In the draft Report on Economic Restructuring for the 2021-2025 period, the Ministry of Planning and Investment also set to gradually reduce the state budget deficit to an average of 3.7%. By 2025, the annual public debt and government debt ratio will be within the public debt ceiling of no more than 60% of GDP, the public debt safety threshold to be about 55% of GDP and Government debt ceiling to not exceed 50% of GDP. The Government debt safety threshold will be about 45% of GDP.
Increasing public investment, reducing recurrent expenditure, and not losing tax revenue are still the goals set by the Government for the coming period.
To overcome the consequences of the Covid-19 pandemic and create a boost in capital to promote growth, it is necessary to increase the total investment of the state budget in the 2021-2025 period.
The registration fees collected for the state budget increased from VND11,816 billion in 2012 to VND40,194 billion in 2019, up by 240% or VND28,378 billion.
According to the public investment plan in the period 2021-2025, the total state budget capital allocated for this period is VND2.87 quadrillion, not VND2,750 trillion as being reported to the 10th session of the 14th National Assembly.