Vietnam Forecasts Budget Deficit of $2.6Bln This Year

Vietnam Forecasts Budget Deficit of $2.6Bln This Year

The Ministry of Finance estimates the budget deficit may reach VND40.75 trillion ($2.6 billion) this year, accounting for 5% of the country's estimated, yearly, gross domestic product.

The ministry plans to issue government bonds, make use of internal financial sources, and make up the balance with foreign loans, aiming to cover 82% of the shortfall.

The calculations are based on planned government expenditure of VND230 trillion ($14.5 billion), of which $2.2 billion is for repaying old debts and $1.3 billion for salaries.

An estimated VND183 trillion ($11.7 billion) will flow into the government's coffers in 2005, to which can be added VND6 trillion ($380 million) left over from last year and VND2 trillion ($126.7 million) in fresh aid from abroad, said Deputy Minister Tran Van Ta.

Most of the government's revenue comes from taxes and crude oil exports.

In the first four months of this year, Vietnam reported total State budget spending at VND71.9 trillion ($4.55 billion), while revenues reached only VND64.05 trillion ($4.06 billion), leaving a deficit of VND7.85 trillion ($497 million).

Vietnam is said to be one of the countries with the highest rates of wasteful state budget expenditure despite being a poor nation. Last year Vietnam reported a State budget deficit of $2.21 billion on total spending of $11.95 billion.

Saigon Times Daily