VN public spending must be controlled: economists
VN public spending must be controlled: economists
Economists last Friday urged the Government to tighten management of public spending to reduce the budget deficit and to ease pressures caused by the public debt.
Further, these measures would help to assure that the goal of 6.7 per cent economic growth is reached for the year.
Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung said, at a Friday workshop on the Viet Nam economy in the first quarter, that it was necessary to review public investment projects to eliminate inefficient ones.Also, CIEM's report on Viet Nam's first quarter economy said that the budget deficit amounted to VND47.1 trillion, or US$2.1 billion, equaling 5.53 per cent of the gross domestic product (GDP), which was higher than the rate of 4.61 per cent in 2015 and 4.91 per cent in 2014, as well as the average rate of 4.86 per cent in the 2011-15 period.
"If the budget deficit is not put under better management, the room for fiscal policies would continue to narrow and pressure for issuance of Government bonds would intensify in the following quarters," CIEM warned.
CIEM cited statistics indicating that the ratio of the budget deficit to GDP of Viet Nam was higher than other countries in the region. Last year, the ratio was 6.9 per cent to GDP, compared to 1.2 per cent ratio in Thailand, 2.3 per cent in Indonesia and 2 per cent in Campuchia.
Although the country's budget deficit was forecast to be on a decline in coming years, its ratio to GDP would become higher than ASEAN countries by 2020, according to CIEM.
The problem in public spending was that the expenditure for growth investment was dropping, while recurrent expenditures and others was rising, Cung said.
During the 2007-13 period, expenditure for growth investment averaged 27.7 per cent of total spending, but fell to 16.3 per cent in 2014 and 15.6 per cent in 2015.
"Being a low-middle income country, public investment played a crucial role in promoting economic development. Such low percentages are worrisome," Cung said.
The figures indicated that efforts of managing public spending still failed to narrow the budget deficit, while pressure for repayment of Government debt was rising from VND185.8 trillion in 2013 to VND296.2 trillion in 2015.
He noted that the management of public spending must be increased to ensure efficiency.
