The Vietnamese Ministry of Finance (MoF) has put Vietnam’s fiscal deficit
at 6.61% of gross domestic product (GDP) in 2014, higher than the cap of 5.3% stipulated earlier by the National Assembly (NA), the country’s supreme legislative body.
According to an MoF report sent to the NA’s Standing Committee, the nation’s budget overspending swelled to 260.14 trillion dong ($11.6 billion) in 2014, 16.1% beyond the limit approved by the NA for that year.
On explaining the higher-than-planned spending, Minister of Finance Dinh Tien Dung said that many infrastructure projects, particularly in transport and irrigation sectors, had to be sped up, causing the government to borrow more.
The latest report has stirred debate among legislators and local economist about lax fiscal discipline.
This was not the first time the government breached spending limits. The country’s fiscal deficit increased to 6.6% of GDP in 2013, much higher than the upwardly revised 5.3% and the initially approved 4.8%.
However, top legislators demanded the government submit a detailed report on its expenditures.
“Our finances are not transparent with many unaccounted expenses,” the Thanh Nien (Young People) cited Phan Trung Ly, chairman of the NA’s Legal Committee, as saying. “We need to abide by laws; there must be no leniency,” he added.
Sharing the same view, NA Chairwoman Nguyen Thi Kim Ngan
, a former deputy minister of finance, said the legislators could not agree with the adjusted figures this time.
Ho Chi Minh City-based Maybank Kim Eng Securities (Vietnam) Co. said in a report Thursday that this practice leads to other concerns. The nation’s fiscal deficit could exceed an estimated 6% of GDP announced by the MoF late last year and the ministry has not tightened spending discipline.