An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy.
Vietnam’s fiscal deficit could go up to 5.59 percent of the GDP this year, exceeding the 3.44 percent target as revenues fall over Covid-19 impacts.
The deficit is forecast at VND319.5-328 trillion ($13.7-14-1 billion) this year, or 4.99-5.59 percent of GDP, Minister of Finance Dinh Tien Dung told the National Assembly Tuesday.
This is because revenues have fallen and regular expenses risen due to the Covid-19 pandemic, he added.
Lawmakers said they had anticipated the high deficit.
Nguyen Duc Hai, chairman of the Financial and Budget Committee of the National Assembly, said the rising deficit was “reasonable,” given the pandemic situation.
This figure could rise further as the government has not been able to sell its stake in many state-owned companies, he added.
But Hai also expressed concern that many people and businesses have not been able to benefit from the increased government spending.
The fact that direct repayment obligations could reach 25 percent of total revenues this year is a risk and could pose threats to national financial security, he added.
Nguyen Duc Kien, head of the Prime Minister’s advisory team, noted that the deficit of most countries would rise this year due to the pandemic, and Vietnam, although falling short of this target, was “a bright spot” in the global context.