Vietnam will cut fiscal deficit to 3.5% of GDP in 2017. Photo: Internet
Vietnam will curb state budget overspending at 178.3 trillion dong ($8 billion), or 3.5% of gross domestic product (GDP
) next year, compared to the respective $11.4 billion and 5% planned for 2016.
The new fiscal deficit ratio is much lower than that over the past years which hovered around 6% of GDP.
According to a parliamentary resolution approved on November 11, state budget revenue is planned at $54.3 billion and budget spending at $62.3 billion next year.
The government plans to borrow $15.23 billion to offset the fiscal deficit, roll over debts and finance public investment. Sovereign bonds with terms longer than five year will make up at least 70% of the volume to be issued.
The parliament also agreed to raise the base salary by 7.43% to 1.3 million dong ($58.2), effective from July 2017. The base salary is used for calculation of salaries of state employees and pensions, depending on corresponding coefficients.
The supreme legislative body earlier approved a plan to increase the government debt ceiling to 54% of GDP from the previous 50%, while maintaining the caps for public and foreign debts at 65% and 50% of GDP, respectively.
The country’s public debt
is projected to touch the ceiling this year after hitting 62.2% of GDP in 2015.