|Total state revenue in 2023 is estimated at VND1.620 quadrillion. Photo: Internet|
The State budget and public debt continue to be restructured
According to the public report on State Budget Estimate in 2023 submitted to the National Assembly by the Government, the positive results achieved in the first months of 2022 and the implementation of fiscal and monetary policies in the program of socio-economic recovery and development are the premise for Vietnam’s economy to recover amid the slow growth of the world economy and complicated development of global and regional political situation, climate change, natural disasters, and pandemics, which increase risks, difficulties and challenges for the Vietnamese economy.
The World Bank lowered its global growth forecast, but Vietnam is the only country that has raised its economic growth forecast. The Asian Development Bank (ADB) predicts that Vietnam’s economic growth may reach 6.5% in 2022 and 6.7% in 2023. The International Monetary Fund (IMF) forecasts that Vietnam’s economic growth in 2023 may reach 6.7%.
The goal of the state budget in 2023 is to expedite the implementation of fiscal policies to support socio-economic recovery and development; continue to restructure the State budget and public debt associated with mobilization and use of financial resources, control inflation, ensure major balances of the economy and objectives of the National Financial Plan and the 5-year borrowing and repayment of public debt for the 2021-2025 period, ensure the fund for salary reform and social insurance policy; expedite the implementation of the mechanism of financial autonomy for the public service delivery units in accordance with the Resolutions of the Central Government.
Based on the assessment of the state budget implementation in 2022 and the socio-economic development plan in 2023, specific goals of the State budget estimate in 2023 have been developed.
The total state budget revenue in 2023 is estimated at VND1,620.7 trillion. The remittance to the State budget accounts for 15.7% of GDP, including revenue from taxes and fees of 13.3% of GDP.
The estimated domestic revenue increases by 3.2% compared with the estimate in 2022 to VND1,334.2 trillion, accounting for 82.3% of the total state budget balance.
The revenue from crude oil revenue is estimated at VND42 trillion, accounting for 2.6% of the total state budget balance. The oil price is estimated at about US$70/ barrel.
The revenue from import-export activities is estimated at VND239 trillion, accounting for 14.7% of the total state budget. The estimated revenue from import-export is VND425 trillion; the spending for value-added tax refund is estimated at VND186 trillion. The revenue from aid is estimated at VND5.5 trillion.
The State budget revenue estimate in 2023 will increase by about VND209 trillion compared with the estimate in 2022. This is a positive estimate in that the world and regional economies still face many potential risks; the domestic production and business activities in some sectors suffer from difficulties and challenges.
Estimated expenditure in 2023 roses by about VND291.6 trillion year-on-year
Regarding budget expenditure, the Ministry of Finance recommends that the estimated public expenditure in 2023 will be performed as follows.
Firstly, ensuring sufficient funds for the implementation of the economic recovery program under the Resolution of the National Assembly; allocating the total expenditure for development investment higher than the state budget deficit for public investment tasks under the Law on Public Investment, and spending for development investment under the State Budget Law; ensuring payment of interests in a timely fashion.
Second, reviewing the ratio of the distribution of revenues and additional funding from the central budget to balance each local budget in 2023.
Third, allocating funds to increase the base salary for cadres, civil servants and public employees; raising pensions and social insurance allowances guaranteed by the state budget and providing additional support for those who retire before 1995, providing preferential allowances for people with meritorious services, and some social security regimes associated with the base salary; adjusting occupational incentive allowances for preventive medicine and grassroots health workers; adjusting the poverty line for 2021 – 2025; implementing national target programs, socio-economic development tasks. Effectively arranging national reserves to ensure timely handling of arising urgent tasks.
Regarding the estimate of state budget expenditure in 2023, the total state expenditure in 2023 is estimated to increase by 16.3% or about VND291.6 trillion to VND2,076.2 trillion compared to the 2022.
The public expenditure for some key tasks is expected to be allocated as follows: Development investment expenditure is estimated to increase by 38.1% compared with the estimate 2022 to VND726.7 trillion, accounting for 35% of total state budget expenditure, ensuring sufficient fund for implementation of the tasks in the program of socio-economic recovery and development.
Expenditures on payment of interests reduces 0.8% compared with the estimate for 2022 to VND102.9 trillion. The recurrent expenditure increases by 5.4% to VND1,172.3 trillion. Ensuring the operation of the state apparatus, complying with the promulgated regimes and policies; spending on implementing national target programs and a number of political and foreign affairs tasks, socio-economic development tasks, and downsizing staff.
According to the Ministry of Finance, based on the 5-year national financial plan and the need for resources to implement Resolution 43/2022/QH15, the estimated state budget deficit in 2023 is VND455.5 trillion, equivalent to 4 42% of GDP (the central budget deficit is about VND430.5 trillion, equivalent to 4.18% of GDP, the local budget deficit is VND25 trillion, equivalent to 0.24% of GDP).
In which, the overspending for socio-economic recovery and development is about 1.53% of GDP; for the state budget balance is 2.89% of GDP (the 2022 estimate is 4% of GDP) which is a very positive level.
The Government’s direct debt repayment obligation is about 19-20% of total state budget revenue. By the end of 2023, public debt is about 44-45% of GDP, government debt is about 41-42% of GDP, and external debt is about 41-42% of GDP, lower than the ceiling and warning threshold allowed by the National Assembly.