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Budget deficit in 2020 decreased by VND18,394 billion compared to the estimate

The socio-economic development task in 2020 saw good results, contributing to financial and budgetary work. Photo: Tran Ngoc

Domestic revenue rose VND2,951billion to VND1,293,728 billion

Decision 1420/QD-BTC publicizing the 2020 budget settlement has been issued by the Ministry of Finance.

Under the state budget estimate in 2020 approved by the National Assembly, budget revenue is VND1,512,300 billion; budget expenditure is VND1,747,100 billion; the budget deficit is VND234,800 billion, equivalent to 3.44% of GDP.

Of which, the central budget deficit is VND217,800 billion and local budget deficit is VND17,000 billion, said the Ministry of Finance

Domestically, the Covid-19 pandemic was complicated and unpredictable, leading to social distancing in many cities and provinces in the second and third quarters, slowing growth in many areas.

At the 10th session, the XIV National Assembly decided to adjust the state budget estimate for 2020, in which the revenue estimate was VND26,753 billion, the expenditure estimate was VND26,666 billion; and the budget deficit was VND133,500 billion to ensure the state budget balance in 2020. Accordingly, the 2020 budget revenue estimate (adjusted) was VND1,539,053 billion; the 2020 state budget expenditure estimate (adjusted) was VND1,773,766 billion.

Socio-economic development tasks in 2020 still achieved positive results with 10 of 12 of the planned targets, exceeding the set targets. The economic growth rate (GDP) reached 2.91%, although lower than the plan (6.8%), but still among the highest positive growth countries in the world.

Accordingly, the state budget revenue in 2020 fell VND28,474 billion or 1.9% compared to the estimate to VND 1,510,579 billion, mainly due to a decrease in revenues from import and export activities.

Of which, domestic revenue rose VND2,951 billion (0.2%) compared to the estimate to VND1,293,728 billion; crude oil revenue decreased VND602 billion (1.7%) compared to the estimate to VND34,598 billion because the average price of crude oil declined 14.3 USD/barrel compared to the estimated price (60 USD/barrel) to 45.7 USD/barrel; revenue from import and export activities fell VND30,556 billion (14.7%) compared to the estimate to VND177,444 billion; and non-refundable aid revenue dropped VND268 billion compared to the estimate to VND4,808 billion.

In addition, following the Party's policy, the Resolution of the National Assembly, and the National Assembly Standing Committee, in 2020, the Government exempted and reduced tax obligations and some budget revenues to help businesses, business households and people overcome difficulties, maintain production and business activities and adapt to the new normal state, which has been appreciated.

Accordingly, the total exempted and reduced amount of tax, fee and land rent was VND16,307 billion; the deferred amount of VAT, CIT, SCT and land rent was VND97,259 billion.

Active and strict management of state budget spending

Regarding state budget spending, the state budget spending in 2020 decreased VND64,242 billion compared to the estimate to VND1,709,524 billion. Of which, development investment expenditure rose by VND77,161billion compared to the estimated to VND576,432 billion; expenditure for interest payment was VND106,466 billion, equal to 90.1% of the estimate; recurrent expenditure (including salary reform) was VND1,013,449 billion, equal to 90.8% of the estimate.

According to the Ministry of Finance, the ministries, central and local agencies closely followed the assigned spending targets and estimates; reviewed and cut non-necessary recurrent expenditures; focused on spending on Covid-19 prevention and control and supporting pandemic-hit-people.

In addition, a number of state budget expenditure tasks in 2020 were lower than the estimate or were not implemented and were canceled. Accordingly, the final settlement of state budget expenditure was lower than the estimate.

In general, in 2020, the management of state budget expenditures was carried out proactively and closely following the assigned estimates; financial discipline was strengthened, state budget spending saw efficiency.

The budget spending in 2020 ensured political tasks, met the requirements of socio-economic development of the country and each locality and covered important and urgent tasks arising in the investment in socio-economic infrastructure, helped overcome consequences of natural disasters and pandemic, ensured social security, national defense and security.

The state budget deficit in 2020 was VND216,406 billion, down VND18,394 billion compared to the estimate at the beginning of the year, equal to 3.44% of realized GDP, much lower than the deficit level allowed by the National Assembly according to Resolution 128/2020/QH14 (5.41% of the planned GDP). Of which the central budget deficit was VND213,089 billion, down VND4,711 billion compared to the estimate, the local budget deficit was VND3,317 billion, down VND13,683 billion compared to the estimate.

The total loan amount was VND436,060 billion, down VND52,861 billion, equaling 89.2% of the estimate (VND216,406 billion). Accordingly, as of December 31, 2020, the total public debt was VND3,520,601 billion, equal to 55.94% of GDP, which is within the limit allowed by the National Assembly.