INTRODUCTION
In compliance with the State Budget Law and based on the Government's reports submitted to the National Assembly regarding the state budget estimate and allocation for 2025, the Ministry of Finance has compiled and published the “Report on the Public Disclosure of the State Budget Estimate for 2025 Presented by the Government to the National Assembly”. This report aims to provide timely, comprehensive, and accurate information to readers about the Government’s assessment of the implementation of state budget tasks in 2024 and the projected budget estimate for 2025, as submitted to the 15th National Assembly during its eighth session for review and decision-making.
Overview of the Report:
· Part I: Review Note on the Execution of State Budget in the fiscal year 2024.
· Part II: Projected State Budget estimates for the fiscal year 2025.
· Part III: The 03-year National Financial Plan for the period 2025-2027.
· Part IV: Appendixes.
We welcome and encourage feedback from organizations and individuals to enhance the transparency and effectiveness of the state budget estimation process, contributing to socio-economic development and serving society and the community in the best way possible.
All feedback, participation, or questions related to the content of the Report should be sent to the Ministry of Finance (State Budget Department), 28 Tran Hung Dao Street, Hoan Kiem District, Hanoi, or via email to: tkns@mof.gov.vn.
Sincerely./.
Ha Noi, October 2024
THE GOVERNMENT'S STATE BUDGET PROPOSAL FOR FISCAL YEAR 2025 SUBMITTED TO THE NATIONAL ASSEMBLY
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Part I
REVIEW NOTE ON THE EXECUTION OF STATE BUDGET
IN THE FISCAL YEAR 2024
I. CONTEXT
The financial and state budget tasks for 2024 were implemented amid a global situation marked by persistent instability, numerous challenges, and significant difficulties. Strategic competition among major powers intensified, military conflicts escalated in certain countries and regions, particularly in the Middle East, and there were prolonged pressures from inflation and high interest rates. The U.S. and several countries postponed interest rate cuts, public debt challenges and risks persisted, and natural disasters, diseases, and climate change continued to evolve in a complex manner, all presenting ongoing challenges to the sustainable growth of the global economy.
Domestically, the economy continued to face numerous difficulties, with consumer demand recovering slowly. Certain industries and sectors still experienced business and production challenges. Inflationary pressures increased due to fluctuations in exchange rates, adjustments in electricity prices, and wage increases.
In this context, to enhance the role of fiscal policy, the Government directed and managed proactive, flexible, and appropriately expanded fiscal policies that were effective and focused. Fiscal measures were issued or proposed to competent authorities, including tax and fee reductions, extensions on taxes, fees, and land rent. The allocation of budgetary resources was focused on priority areas, with strict savings on regular expenditures. These efforts were coordinated closely and harmoniously with monetary policies and other macroeconomic policies to support the economy, ease difficulties for businesses and citizens, and promote economic recovery and socio-economic development.
Macroeconomic stability was maintained, major balances were secured, and the economy continued to recover and grow positively (GDP growth of 5.66% in Quarter 1, 6.93% in Quarter 2, 7.4% in Quarter 3, and 6.82% for the first nine months). The consumer price index (CPI) averaged an increase of 3.88% compared to the same period last year. State revenue was substantial and showed year-on-year growth, while state budget deficit and public debt were tightly managed, contributing to the consolidation of national financial security. Financial and securities markets developed, and the monetary market and exchange rates were managed flexibly. The total export-import turnover in the first nine months increased by 16.3% year-on-year, with a trade surplus of 20.79 billion USD. Foreign direct investment inflows rose, with total registered capital reaching 24.78 billion USD in nine months, up 11.6% year-on-year. Social welfare policies, public health protection, and social benefits were well implemented. For the whole year, GDP growth is forecasted to be approximately 6.8-7%, with a goal to exceed 7%, higher than the National Assembly's target (6-6.5%).
II. EXECUTION OF STATE REVENUE COLLECTION AND EXPENDITURE TASKS IN THE FISCAL YEAR 2024
Based on the socio-economic situation and the execution of the state budget tasks for the first nine months of the fiscal year, the assessment of state budget revenue and expenditure tasks for the entire year of 2024 is as follows:
1. Regarding State Revenue Collection
Right from the beginning of the year, the government has directed the effective implementation of tax laws and state budget revenue tasks; strengthened revenue management, tax inspection, and audit, combating revenue losses; ensured strict control over value-added tax refunds in accordance with legal regulations; and focused on promoting digital transformation, modernizing tax collection, and expanding the deployment of electronic invoices.
In the process of administration, to support the economy and relieve difficulties for businesses and the people, the government and the Prime Minister have directed ministries, sectors, and localities to research and propose the issuance or presentation to competent authorities of synchronized policy solutions to exempt, reduce, and extend the deadlines for tax, fee, and land rental payments to support businesses and citizens. With the solutions implemented, combined with the economic recovery momentum, this has positively impacted the state budget revenue results for 2024.
The state budget revenue estimate is 1,700.99 trillion VND. Based on the estimate of state revenue for the first nine months being 1,448.2 trillion VND, equating to 85.1% of the estimate and increasing by 17.9% compared to the same period in 2023, the projected final outturn of total state revenue for the entire year is approximately 1,873.3 trillion VND, an increase of 10.1% compared to the National Assembly's estimate and up 6.8% compared to the implementation in 2023; the revenue mobilization rate into the state budget is about 16.5% of GDP1, with tax and fee revenue reaching 13.1% of GDP.
It is estimated that nearly all areas of state budget revenue have met or exceeded the assigned estimates. Specifically:
a) Domestic Revenue
The revenue estimate is 1,444.4 trillion VND. Domestic revenue for the first nine months is estimated at 1,203.1 trillion VND, equating to 83.3% of the estimate and increasing by 18.9% compared to the same period in 2023; the projected final outturn of domestic revenue for the entire year is approximately 1,572.7 trillion VND, an increase of 128.3 trillion VND (+8.9%) compared to the National Assembly's estimate, and up 6.9% compared to the implementation in 2023.
b) Revenue from Crude Oil
The revenue estimate is 46 trillion VND, based on a domestic extraction volume of 8.3 million tons and an oil price of 70 USD/barrel. The estimated revenue for the first nine months is 44.4 trillion VND, equating to 96.6% of the estimate, a decrease of 2.9% compared to the same period in 2023.
With the projected average oil price for the entire year reaching around 85 USD/barrel, 15 USD/barrel higher than the estimated price, and the extraction volume for the whole year estimated to be 8.3 million tons, in line with the assigned plan; the total revenue from crude oil for the entire year is estimated to be 59.3 trillion VND, an increase of 13.3 trillion VND (+28.9%) compared to the estimate, but a decrease of 4.3% compared to the implementation in 2023.
c) Net Trade Revenue
The revenue estimate is 204 trillion VND; the estimated revenue for the first nine months is 200.2 trillion VND, equating to 98.1% of the estimate and increasing by 17.6% compared to the same period in 2023, primarily due to an increase in the import-export turnover of goods compared to the same period, positively affecting state budget revenue in this area. The final outturn of net trade revenue is estimated at 235.2 trillion VND, an increase of 31.2 trillion VND (+15.3%) compared to the estimate, and up 7.6% compared to the final outturn in 2023.
d) Revenue from Aid
The revenue estimate is 6.58 trillion VND; the estimated revenue for the first nine months is 450 billion VND, equating to 6.8% of the estimate. The total revenue for the entire year is estimated at 6.1 trillion VND, equating to 92.2% of the estimate, an increase of 128.3% compared to the implementation in 2023.
In summary, it is estimated that the total state balancing revenue for 2024 will reach 1,873.3 trillion VND, an increase of 172.3 trillion VND (+10.1%) compared to the estimate, including an estimated increase of about 100-110 trillion VND in central budget revenue compared to the estimate; and an estimated overall increase of about 60-70 trillion VND in local budget revenue compared to the estimate.
2. Regarding State Budget Expenditure
The state budget expenditure estimate for 2024 is 2,119.4 trillion VND; the estimated expenditure for the first nine months is 1,256.3 trillion VND, equating to 59.3% of the estimate, an increase of 1.4% compared to the same period. Based on a focused effort to implement solutions to accelerate the disbursement of public investment capital from the state budget and funds for national target programs; to thoroughly save on regular expenditures, review and rearrange expenditure tasks, and cut unnecessary and urgent expenses, while managing expenditures strictly within the budget estimates and revenue capacities at all levels, the total estimated state budget expenditure for the entire year will reach 2,281.7 trillion VND, an increase of 162.3 trillion VND (+7.7%) compared to the estimate, mainly from the expected revenue exceeding the estimate. This includes:
a) Development & Investment Expenditure
The National Assembly decided on a development investment expenditure estimate of 677.3 trillion VND. The 2024 capital plan assigned by the Prime Minister is approximately 677.9 trillion VND. The estimated development investment expenditure for the first nine months is approximately 320.6 trillion VND, equating to 47.3% of the National Assembly's estimate and 47.29% of the Prime Minister's assigned plan, representing a decrease in both value (about 42.7 trillion VND) and percentage compared to the same period (51.38% of the Prime Minister's assigned plan in 2023).
Based on additional capital from the state budget reserve, increased investment expenditure from local budget sources from lottery revenues, recovery of state budget investment in local enterprises, and allocation from increased revenues and local budget reserves; reduced investment expenditure on projects using loans and land use fees, the estimated total development investment expenditure for the entire year (including amounts carried over to the next year) will be approximately 684.4 trillion VND, an increase of 7 trillion VND (+1.0%) compared to the estimate. The total capital disbursement for the year aims to reach about 95% of the Prime Minister's assigned plan.
b) Interest Repayment Expenditure
The interest payment expenditure estimate is 111.7 trillion VND; the estimated expenditure for the first nine months is 77.3 trillion VND, equating to 69.2% of the estimate. The estimated total expenditure for the entire year will be 111.3 trillion VND, a decrease of 396 billion VND (-0.4%) compared to the estimate. Debt repayment has been carried out fully and on time as committed, contributing to strengthening the national credit rating.
c) Recurrent Expenditure
The recurrent expenditure estimate is 1,259.6 trillion VND2; the estimated expenditure for the first nine months is 856.5 trillion VND, equating to 68% of the estimate, meeting the requirements for socio-economic development, state management, and timely payment of due debts, ensuring funding for epidemic prevention, social welfare tasks, and care for salary recipients, pensioners, and social welfare beneficiaries from the state budget. Proactively sourcing to increase the base salary (from 1,800,000 VND/month to 2,340,000 VND/month) for salary recipients from the state budget and increasing pensions and allowances for those under the state budget, effective from July 1, 2024. Additionally, 16,780 tons of rice have been allocated to address the aftermath of floods and storms, providing relief and assistance to the people.
The total estimated regular expenditure for the entire year is approximately 1,274.6 trillion VND3, an increase of about 15 trillion VND (+1.2%) compared to the estimate.
3. Regarding State Budget Balance
The estimated state budget deficit for 2024, as decided by the National Assembly, is 399.4 trillion VND, which is 3.6% of GDP, including a central budget deficit of 372.9 trillion VND and a local budget deficit of 26.5 trillion VND.
Based on revenue capacity and the evaluation of state budget expenditures for the entire year mentioned above, the projected state budget deficit is estimated to be approximately 389.4 trillion VND, equating to about 3.4% of the estimated GDP, a decrease of about 10 trillion VND compared to the estimate. Of this, the estimated central government deficit is expected to match the estimate, while the local government deficit is expected to decrease by about 10 trillion VND, primarily due to reduced investment expenditure from local loan capital.
By the end of 2024, it is projected that public debt will be around 36-37% of GDP, government debt will be about 33-34% of GDP, and national foreign debt will be approximately 32-33% of GDP. The direct debt repayment obligation of the government is estimated to be about 21-22% of total state revenues, ensuring it remains within the limits set by the National Assembly. The Government is proactively issuing bonds4 to effectively utilize state funds, ensuring the central budget is balanced, and to timely repay principal debts as they come due.
III. REVIEW NOTE ON THE IMPLEMENTATION OF FISCAL POLICIES TO SUPPORT THE ECONOMY, ALLEVIATE DIFFICULTIES FOR BUSINESSES AND CITIZENS, STABILIZE MACROECONOMICS, CONTROL INFLATION, PROMOTE GROWTH, AND ENSURE SOCIAL WELFARE
In the context of ongoing difficulties for enterprises and slow economic recovery, the Government has presented to the National Assembly and the Standing Committee of the National Assembly to issue and enact policies within its authority. At the same time, it has focused on directing the implementation of fiscal policies to work alongside monetary policy and other macroeconomic policies to relieve difficulties for enterprises and the public, stabilize the macroeconomy, control inflation, ensure major balances in the economy, promote economic growth, and ensure social security and the well-being of the people.
1. Regarding State Revenue Policies
In addition to continuing the implementation of tax, fee, and charge exemptions and reductions according to documents issued since late 2023, which will take effect in 2024, based on the Resolutions of the National Assembly and an assessment of the difficulties faced by enterprises and the economy, the Government and the Prime Minister have directed research and recommendations for the Government to propose to the competent authorities to issue and enact policies to reduce and extend tax, fees, charges, and land rental payments for enterprises and the public. This includes: reducing the value-added tax rate by 2% (from 10% to 8%); reducing the environmental protection tax on gasoline, oil, and grease products; extending the deadlines for paying value-added tax, corporate income tax, personal income tax, and land rent in 2024; extending the deadline for special consumption tax on domestically produced and assembled cars; reducing the registration fee by 50% for domestically produced or assembled cars for three months (from September to November 2024); and reducing various fees and charges by 10% to 50%.
It is projected that the scale of the packages for reducing and extending taxes, fees, charges, and land rental payments will be approximately 189.6 trillion VND (of which: tax, fee, and charge reductions are about 94.9 trillion VND; tax and land rental extensions are about 94.7 trillion VND).
As of the end of September, approximately 116.4 trillion VND has been reduced or extended (of which: reductions of about 68.7 trillion VND; extensions of about 47.7 trillion VND).
2. Regarding State Budget Expenditure Policies
There is a strong focus on tight management of state budget expenditures, with an emphasis on strictly saving on regular expenditures. Ministries, agencies, and localities are required to cut down on centrally allocated expenditures that have not been allocated by June 30, 2024, to reserve additional resources for public investment and social security. The Government and the Prime Minister have decided to establish a Fund to eliminate temporary housing and dilapidated houses for poor and near-poor households.
IV. Key Measures to Achieve the 2024 State Budget Goals
With a strong commitment to overcoming difficulties and challenges, the remaining months of 2024 will focus on the following measures to achieve and exceed the State Budget targets:
(1) Focus on implementing fiscal, monetary, and other macroeconomic policies to relieve difficulties for businesses and citizens, control inflation, maintain stability, sustain growth momentum, and ensure major economic balances. Strive to meet or exceed the 2024 growth targets, setting a foundation and momentum for 2025 and the 2026-2030 period.
(2) Continue to enhance the legal framework for state revenue collection, carry out synchronized solutions to manage revenue, prevent tax losses, and ensure proper, sufficient, and timely collection. Accelerate digital transformation, apply information technology, and enhance revenue management. Intensify efforts to combat trade fraud, transfer pricing, import price manipulation, and cross-border smuggling.
(3) Exercise tight control over budget expenditures, enforcing discipline and improving the efficiency of state budget use. Prioritize savings in recurrent expenditure by actively reviewing and rearranging spending tasks, cutting an additional 5% of assigned recurrent expenditure budgets. Concentrate resources on wage reform policies, social welfare programs, and poverty reduction. Accelerate the implementation and disbursement of public investment, especially for national key projects and targeted programs.
(4) Strictly control budget deficits and public debt within the limits set by the National Assembly. Arrange for timely, complete, and accurate debt repayments of principal and interest on State Budget loans. Issue government bonds based on revenue, expenditure, and public investment disbursement schedules to ensure efficient and economical use of funds.
(5) Continue to refine the legal framework for monitoring prices and markets to ensure the stable and safe operation of the financial market, stock market, and corporate bond market.
(6) Improve discipline and adherence in public finance. Strengthen inspection, monitoring, and transparency in the use of the State Budget and public assets.
Part II
PROJECTED STATE BUDGET ESTIMATES
FOR THE FISCAL YEAR 2025
I. Forecast of Global and Domestic Economic Conditions
The global and domestic economic outlook for 2025 is expected to face numerous difficulties and challenges.
Domestically, the economy is projected to maintain a positive trend through the end of 2024. Many major international organizations have provided optimistic evaluations of Vietnam’s growth prospects for 20255. However, challenges remain, including internal economic issues related to capacity, efficiency, labor productivity, and competitiveness, as well as concerns about non-traditional security issues.
Globally, the world economy is expected to show a mild recovery trend, particularly in major economies such as the United States and China. However, the short-term recovery outlook is uneven. New developments in the political landscapes of several major countries bring risks of policy changes in the near future. Conflicts and geopolitical tensions show no signs of abating, and trade tensions, protectionism, and climate change risks are on the rise.
II. State Budget Objectives and Tasks
Based on the forecasts for global and domestic economic conditions, along with socio-economic development requirements, the 2025 state budget objectives are defined as follows: To establish and manage fiscal policy in alignment with monetary policy, contributing to macroeconomic stability, inflation control, and national financial security. To ensure resources are available to implement socio-economic development and social welfare tasks, with a focus on key national infrastructure investments and regional and inter-regional connectivity. To strengthen financial and budgetary discipline, promote savings, and prevent wastefulness, while ensuring effective use of state financial resources in conjunction with mobilizing social resources and advancing administrative restructuring and streamlining.
III. Estimated State Budget Revenue and Expenditure
Based on the assessments of 2024 state budget execution and the 2025 socio-economic development plan (which projects GDP growth of around 6.5-7.0%, an average CPI increase of approximately 4.5%, and export growth of around 6% compared to 2024), the 2025 state budget estimates are as follows:
1. Estimated State Revenue
The estimated revenue for 2025 is 1,966.8 trillion VND, representing a 15.6% increase over the 2024 estimate and a 5% rise over the 2024 expected performance, achieving a budget mobilization rate of about 16% of GDP, with approximately 12.8% from taxes and fees. Specific projections include:
a) Domestic Revenue: 1,668.3 trillion VND, up by 95.6 trillion VND compared to the 2024 expected final outturn, accounting for 85% of the total balancing revenue.
b) Crude Oil Revenue: 53.2 trillion VND, an increase of 7.2 trillion VND compared to the 2024 estimate but a decrease of 6.1 trillion VND from the 2024 expected final outturn. This revenue represents 2.7% of the total balanced budget revenue, based on an estimated production volume of approximately 8 million tons and an estimated oil price of around USD 75-80 per barrel.
c) Net Trade Revenue: 235 trillion VND, an increase of 31 trillion VND from the 2024 estimate and comparable to the 2024 expected final outturn, accounting for 12.1% of the total balanced budget revenue. This includes estimated revenue of 411 trillion VND and estimated VAT refund expenditures of 176 trillion VND.
d) Aid Revenue: 10.2 trillion VND, an increase of 4.2 trillion VND compared to the 2024 expected final outturn.
These revenue projections are considered optimistic, set higher than the previous year, against a backdrop of intertwined risks and challenges in the domestic and international economic landscape. This requires all levels and sectors to commit to achieving the state revenue targets from the very beginning of the year.
2. State Budget Expenditure
The principles for allocating state expenditure budget for the year 2025 are as follows:
Firstly, allocate budget for investment & development at a proactive level, ensuring that the total development & investment expenditure exceeds the state budget deficit and aligns with the state budget balancing capability.
Secondly, ensure full, timely allocation for debt interest payments, contingency funds, and national reserves at a reasonable level to promptly address urgent emerging needs.
Thirdly, provide adequate funding for public sector wages, pensions, social insurance allowances, benefits for individuals with meritorious service, and other social security policies, all at adjusted rates effective from July 1, 2024.
Fourthly, allocate recurrent expenditure budget in a strict and economic manner, prioritize established policies and essential, urgent tasks.
Accordingly, the total 2025 state expenditure budget is approximately 2,548.9 trillion VND, including funds from the central government’s accumulated resources for wage reform and local government wage reform funds carried over from 2024 for 2025 budgeting.
Budget allocations for specific expenditure items are as follows:
- Development & Investment Expenditure: 790.7 trillion VND, accounting for around 31.0% of total state budget expenditure.
- Interest Repayment Expenditure: 110.5 trillion VND, of which central government interest payments are 107.4 trillion VND and local government interest payments are 3.1 trillion VND, ensuring compliance with debt service obligations.
- Recurrent Expenditure: 1,554.7 trillion VND6, representing about 60.9% of total state budget expenditure. This includes central government recurrent expenditure of 726 trillion VND and local government recurrent expenditure of 828.6 trillion VND (including central government supplements to cover the base wage of 2.34 million VND per month), ensuring fulfillment of socio-economic development tasks at the decentralized level.
3. State Budget Deficit
Based on the targets outlined in the National Assembly’s Resolutions No. 23/2021/QH157 and No. 43/2022/QH15, the estimated state budget deficit for 2025 is projected at 471.5 trillion VND (approximately 3.8% of GDP). This includes a Central Budget deficit of 443.1 trillion VND (around 3.6% of GDP) and a local budget deficit of 28.4 trillion VND (around 0.2% of GDP). By the end of 2025, all public debt indicators are expected to remain within approved limits.
IV. KEY MEASURES TO IMPLEMENT THE 2025 STATE BUDGET ESTIMATES
Firstly, maintain the foundation of macroeconomic stability, control inflation, ensure major economic balances, and achieve sustainable development across economic and social sectors.
Secondly, strictly enforce revenue collection laws and state revenue management, focus on strengthening the management of state revenue, ensuring accurate, full, and timely collection, strive to fulfill revenue estimates at the highest possible level to secure resources for economic and social development objectives.
Thirdly, enhance financial discipline and efficiency: Improve the management, allocation, and use of the state budget in line with goals for economic restructuring and sustainable development.
Fourthly, emphasize innovation and organizational restructuring: Streamline organizational structures and reduce workforce size to improve the effectiveness and efficiency of the political system, and innovate the financial mechanism for public service units.
Fifthly, restructure and privatize state-owned enterprises: Divest state capital from enterprises, create a balanced ownership structure, and focus on key sectors critical to the state economy.
Sixthly, ensure stability and safety of financial markets and services: Promote fair competition among economic sectors and maintain stable and safe operations in financial and financial service markets.
Seventhly, continue to improve the investment and business environment: Advance administrative reforms, promote national digital transformation, and create breakthroughs in economic and social development.
Part III
THE 03-YEAR NATIONAL FINANCIAL – BUDGETARY PLAN
FOR THE PERIOD OF 2025 - 2027
1. Context Forecast for the Three-Year Period of 2025-2027
International organizations generally assess that the global economic outlook will remain fundamentally stable with a slight increase compared to 2024, indicating that the world economy will continue in a period of low growth in the short term. The World Bank (in June 2024) forecasted global GDP growth at 2.7% for both 2025 and 2026, while the International Monetary Fund (in July 2024) projected global economic growth at 3.3% for 2025.
The global economy is expected to continue facing several challenges: escalating and prolonged geopolitical tensions that are difficult to predict; prolonged high policy interest rates in developed economies leading to cautious growth; increased policy-related trade uncertainty; rising global debt levels, and more.
Domestically, the economic outlook is assessed as positive, with macroeconomic stability maintained and economic growth projected to recover, with each subsequent year expected to achieve higher growth than the previous one. The World Bank forecasts Vietnam's economic growth at 6.5% for 2025-2026, keeping it among the leading countries globally in terms of economic growth rate. Innovation, green transition, digital transformation, response to climate change, natural disasters, diseases, and international integration have been, are, and will continue to be crucial tasks that impact and drive socio-economic development.
However, alongside these favorable factors, Vietnam's economy during the 2025-2027 period is forecasted to face several difficulties and challenges from the international environment and existing issues such as: the level of participation in the global and regional supply chains; limited access to the digital economy and digital society; rapid urbanization creating pressure on infrastructure and environmental pollution management; the issue of an aging population; and the impact of climate change, natural disasters, diseases, and environmental pollution, which create significant financial and budgetary pressures.
2. Objectives of the Three-Year National Financial – Budgetary Plan for the Period of 2025 - 2027
Develop and implement a reasonably expansive, flexible fiscal policy with focus and priority areas, in close and harmonious coordination with proactive, flexible, and timely monetary policy to contribute to macroeconomic stability, control inflation, ensure national financial security, and support the recovery and development of people and businesses. Ensure resources for fulfilling socio-economic development and social welfare tasks, particularly focusing on the resources for the rapid execution of important national and key infrastructure projects, regional and inter-regional connectivity. At the same time, strongly promote new growth drivers, such as digital economy development, green economy, circular economy, sharing economy, and emerging sectors and fields. Strengthen fiscal discipline and state budget order; practice thrift, combat waste, and use state financial resources effectively while mobilizing social resources and promoting the streamlining of the apparatus.
3. Estimated Balance Framework of State Revenue and State Budget Expenditure for the Three-Year Period of 2025 - 2027
a) Regarding state revenue: The total state revenue for the three-year period of 2025-2027 is estimated at about 5.9 million billion VND, an increase of approximately 8.8% compared to the estimated revenue for the 2022-2024 period. The average state budget revenue mobilization rate is about 14.7% of GDP, with tax and fee revenue mobilization averaging about 12.1% of GDP.
b) Regarding state budget expenditure: The total state budget expenditure for the three-year period of 2025-2027 is projected at about 7.4 million billion VND, equivalent to 121% of the total expenditure for the 2022-2024 period.
c) Regarding state budget deficit and public debt: The state budget deficit for the years 2025-2027 is expected to be around 3.5% of GDP. Public debt for the 2025-2027 period is projected to be about 37-38% of GDP.
4. Some Proposals and Solutions for Implementing the National Three-Year Financial-State Budget Plan for 2025-2027
a) In the short term
(1) Continue to prioritize forecasting and analysis while regularly monitoring and closely following global and regional political-economic developments to devise timely, proactive, and flexible fiscal policy solutions. Focus on institutional and legal reforms towards stronger decentralization and delegation of authority to address current obstacles and inadequacies; complete a unified, coherent, and clear legal system.
(2) Effectively implement newly amended and supplemented tax laws and multi-law amendments in the areas of budgeting, investment, capital management, and public asset management to address urgent issues and help overcome difficulties in production and business activities.
(3) Rigorously perform state budget revenue tasks, striving to meet and exceed revenue targets; at the same time, seek to increase revenue in areas and sectors with favorable conditions to compensate for revenue reductions resulting from the implementation of tax, fee, and charge exemptions and reductions.
(4) Manage state budget expenditures strictly, economically, and effectively; proactively review and reorganize expenditure tasks. Focus on disbursing public investment funds, especially for key national projects, expressways, inter-regional, coastal projects, and national target programs.
(5) Strictly control contingent debt obligations of the state budget and local government debt, ensuring indicators remain within safe debt limits. Mobilize and use borrowed funds efficiently and economically.
b) In the medium and long term
(6) Focus on effectively and substantively restructuring the economy in conjunction with renewing the growth model to enhance productivity, quality, efficiency, and competitiveness.
(7) Continue to strengthen the management, allocation, and use of financial-state budget resources, linked with the improvement of decentralization and delegation mechanisms, emphasizing the responsibility of ministries, central agencies, and local authorities. Accelerate the disbursement of public investment and promptly resolve obstacles in implementation, ensuring effective use of investment funds in conjunction with practicing thrift.
(8) Continue to adhere to the principle that borrowings to offset state budget deficits are only spent on development and investment tasks; spendings should align with the economy's ability to mobilize resources and borrowing within the capacity for debt repayment.
(9) Strictly enforce discipline and adherence to national financial–budgetary, public debt, and public asset management; strengthen oversight, inspection, auditing, and monitoring. Enhance anti-corruption and anti-waste efforts in the management and use of public finances and public assets/.
1 The estimated GDP value for 2024 is approximately 11,363 trillion VND.
2 This includes 19.271 trillion VND allocated to offset the balance in recurrent expenditures at the local government level.
3 This includes 19.271 trillion VND allocated to offset the balance in recurrent expenditures at the local government level.
4 As of September 24, 2024, 262 trillion VND in government bonds have been issued, with an average maturity of 11.15 years and an average interest rate of 2.5% per year.
5 The World Bank (April 2024) forecasted Vietnam's growth for 2025 at 6%, while the Asian Development Bank (July 2024) projected a growth rate of 6.2%.
6 This includes additional funding to ensure payment of wages at a base level of 2.34 million VND per month, covering salaries, pensions, social insurance benefits, monthly allowances, benefits for individuals with meritorious service, the standard social assistance level, and certain social security policies linked to the base wage, as adjusted from July 1, 2024.
7 The average state budget deficit ratio for the 2021-2025 period is 3.7% of GDP, with an average central government deficit of 3.4% of GDP and an average local government deficit of 0.3% of GDP. During implementation, efforts will aim to reduce this ratio to below 3.7% of GDP.
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