HANOI – Minister of Finance Ho Duc Phoc said the ministry supports the Government’s plan to launch economic stimulus packages, to accept an increase in overspending of the State budget this year before reducing overspending in the following years.
Speaking at a Q&A session on November 9 as part of the 15th National Assembly’s second sitting, Phoc said that the Finance Ministry proposed the Government develop economic stimulus packages through interest rate support valued at VND20 trillion per year and VND40 trillion for two years.
Suppose the lending rate for production and business activities is at 4% per year and the Government rolls out an interest rate support package valued at VND40 trillion for two years, it is estimated that some VND1 quadrillion worth of loans would be given. This means around VND1 quadrillion would be pumped in the economy to help create jobs, facilitate production and increase revenue, and then reduce the overspending of the State budget.
The minister added that the country’s state budget revenue this year is expected to exceed the target, while the budget expenditure would be the same as planned, and the overspending of the State budget would comply with the National Assembly’s regulations.
He said the Government had issued multiple fiscal policies to support businesses and local residents as well as to serve the Covid fight, with a total value of around VND200 trillion.
Further, in response to opinions that the room for extending public debt remained ample and it was necessary to raise the overspending of the State budget, the finance minister asserted that the room remains little as the Government had borrowed over VND1.8 quadrillion in the 2016-2020 period. For the 2021-2025 period, the Government is set to borrow over VND3 quadrillion, which is 1.77 times higher than the previous period. Also, the public debt by the end of 2025 is estimated to be 1.6 times higher than the 2020 figure.
However, Phoc affirmed that the Finance Ministry would back the Government’s move to launch economic stimulus packages.