Vietnam looks for sustainable fiscal policies to support growth

Vietnam is still spending more than it earns, a conference in Hanoi has warned.

Monday's conference was held to release the Annual Vietnamese Economic Report 2018 which focuses on sustainable fiscal policies and growth strategies. It also reviewed Vietnam's economy in 2018 and prospects for 2019.

According to Associate Professor Doctor To Trung Thanh, co-author of the report, public spending has reduced substantially in the past five years but still remains relatively high, even higher than that of comparable developing countries. The growth of public debt was higher than the economic growth rate during the period of 2012-2017 while the percentage of public debt to GDP in 2018 hit 61%, higher than in China and other ASEAN countries.

Vietnam's current public debt is still within the limit accepted by the National Assembly but excludes some of the potential sources. The debt of State-owned enterprises is estimated to be 30.6% of the GDP. The current public debt and budget deficit are barriers to the macro-economy and economic growth in the long run, said Mr. Thanh.

Experts at the conference said that a sustainable fiscal policy to support growth would require Vietnam to completely reform to meet its growth targets in the short, medium, and long term.

Professor Doctor Tran Tho Dat, Rector of the National Economics University, suggested preferential policies for individual household businesses to register as enterprises as a way to increase government revenue.

Household businesses contribute 30% of the GDP generated by the private sector, which is advocated as an important element of the whole economy. They have great potential for stronger development and should be duly accommodated with easy business registration procedures, he said.

Source: VOV5