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Budget revenue projected to beat target despite Covid

The Saigon Times

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HCMC – The State budget revenue this year may reach over VND1.3 quadrillion, some VND22.2 trillion higher than the target, despite the severe impact of the Covid-19 pandemic.

The fourth wave of Covid infections, which began in late April, has sent the Vietnamese economy into a tailspin due to draconian social distancing measures and travel restrictions. The third quarter saw the nation’s gross domestic product (GDP) plummeting 6.17%, the biggest contraction since 2000.

Speaking at the opening of the 15th National Assembly’s second sitting on October 20, Prime Minister Pham Minh Chinh delivered a report on the country’s socioeconomic performance in the January-September period of this year and plans for next year, the local media reported.

Chinh said the fourth Covid wave has hit many parts of the nation, including many manufacturing hubs, and that multiple unprecedentedly strong measures have been taken to stop the spread of the highly catagious Delta coronavirus variant.

Nevertheless, the country’s macroeconomic fundamentals have remained stable while inflation has been kept under control. In addition, the State budget overspending has been below 4% of GDP.

The prime minister also pointed out shortcomings, such as the poor fight against the pandemic in some provinces and tough regulations on the movement of people, hindering economic activity and affecting the daily lives of local residents.

Early in the fourth wave of infections, Covid-19 vaccines were in short supply and the healthcare system was overwhelmed, resulting in the high number of Covid-19 deaths.

The country may fail to achieve four of the 12 targets for this year. GDP expanded only 1.42% in the January-September period.

In addition, many supply chains have been disrupted, the public investment disbursement has been far lower expected and the labor market has been heavily affected.

PM Chinh also mentioned the increasing bad debts, the slow restructuring of State-owned enterprises and challenges in cyber security.

In the remaining months of the year, the Government will continue focusing on the fight against the pandemic and ensuring enough Covid-19 vaccine supplies and antivirals to bring the pandemic under control and bolster the economic recovery process.

The Government will also do away with policy bottlenecks to help businesses cut costs, adjust fiscal and monetary policies, accelerate public investment disbursements, help the labor market recover, ensure the smooth circulation of goods, bring students back to in-person classes and enhance the Covid vaccine diplomacy.

As for the socioeconomic development plan for next year, PM Chinh said the Government set a GDP growth target at 6%-6.5%, consumer price index at 4% and State budget overspending at 4% of GDP.

He stressed that the health and lives of residents must be the first priority. The country will concurrently fight the pandemic and help the economy recover, focusing on resuming production and business, boosting exports and speeding up public investment and calling for the private sector to get involved in infrastructure development projects.

Assessing the Government’s report, Vu Hong Thanh, chairman of the NA’s Economic Committee, suggested the Government consider selling G-bonds to raise funds for development.

According to the NA’s Economic Committee, many provinces have abused lockdown, quarantine and mobility restriction measures, thus affecting economic activity.

The Economic Committee also raised concerns over the trade deficit of US$2.13 billion in the January-September period and the small proportion of domestic enterprises in exports.

Thanh said the GDP growth target of 6%-6.5% should be considered carefully.

As for the labor market, Thanh suggested formulating a plan to respond to the exodus of migrant workers from large industrial cities and provinces, deal with supply chain disruptions and attract workers to come back to work.

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