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Vietnam sees rising budget deficit in H1

Xinhua, July 4, 2016 Adjust font size:

Budget deficit of Vietnam in the first half of 2016 hit 82.9 trillion Vietnamese dong (some 3.7 billion U.S. dollars) due to rising recurrent expenditures and repayment of debts, according to the country's General Statistics Office on Monday.

Total state budget revenue during the period reached 425.6 trillion Vietnamese dong (over 19.08 billion U.S. dollars), equal to 42 percent of estimates.

Meanwhile, budget spending hit 508.5 trillion Vietnamese dong (over 22.8 billion U.S. dollars) during the six-month period, equaling 39.9 percent of the yearly estimate.

Recurrent expenditures accounted for 65 percent of the country's total spending, up from the level of 50 percent in the previous year, Vietnam's state-run news agency cited Ministry of Planning and Investment as saying.

Expenditures for development investment, meanwhile, dropped to 17 percent from last year's 30 percent.

In 2016, Vietnamese government planned to borrow 452 trillion Vietnamese dong (nearly 20.3 billion U.S. dollars) through government bonds and official development assistance (ODA), of which 254 trillion Vietnamese dong (over 11.39 billion U.S. dollars) will be used to offset the deficit.

Under the plan, estimates for debt payment this year are also expected to rise to some 273 trillion Vietnamese dong (over 12.24 billion U.S. dollars) from 148.3 trillion Vietnamese dong (over 6.65 billion U.S. dollars) in 2015.

The Ministry of Finance forecast the deficit would reach 4.95 percent of the country's gross domestic product (GDP) in 2016 while international economic organizations have forecast a much higher rate.

For instance, HSBC predicts the budget deficit will rise to 6.6 percent of the GDP in 2016, raising the ratio of public debt to GDP to a 64.5 percent threshold due to the high public debt ratio and falling oil price.

Experts have recommended that the government stabilize recurrent spending and adopt tough measures to curtail spending and increase revenue. Endit