10
principal repayment. The majority of bonds are
mobilized from domestic sources. The challenge
is not to print money directly to offset budget
overspending, but the way commercial banks
now buying government bonds to refinance also
increases the money supply to the economy.
As a consequence, the economy may face high
inflation as the economic theories have shown
(Sargent and Wallace (1981). Thus, sustainable
restructuring of public debt and diversification
debt financing in the capital market should be
continued.
Positive hightlights for 2018
Although many issues need to be resolved, the
implementation of the State Budget estimation
for 2018 also has many positive signs:
Firstly
, the Government and the Ministry of
Finance have taken drastic measures to promote
economic growth and renovate the business
environment. According to the Business
Environment Report 2018, Vietnam ranks 68
th
,
with a score of 67.93 on a scale of 100. Thus,
compared to the rankings last year, Vietnam has
risen 14
th
ranks from the 82
nd
rank. In particular,
the index of tax payment is assessed to have the
highest increase in the index of Vietnam with
14.78 points. Specifically, in 2018, this index
reached 72.77/100 points, higher than the level
of 57.99 per 100 points in 2017.
Secondly,
economic growth in 2018 will
continue to improve on the basis of positive
changes in the economic situation in 2017. The
world economic situation in 2017 is also expected
to improve (IMF, 2017).
Thirdly,
the 2018 budget projections do not
increase too much compared to 2017. The forecast
of 2018 budget spending in estimating is usually
considered on the basis of the current state
budget implementation. In 2018, it is expected
that the state budget deficit will increase by
only 7.4% compared to the estimated figure for
2017, which will be favorable for completing
the expenditure estimate. The Government’s
determination to reform public spending will
also be a good opportunity to achieve the targets
set in the 2018 State Budget.
The overall assessment can be seen, the
implementation of fiscal policy in 2017 in the
context of increased revenue estimate is very
difficult task. Therefore, the perspective of
fiscal policy in 2017 was active, tight, thrifty;
strict discipline, financial discipline contributed
to the objective of economic growth; efforts
to increase revenues and save state budget
expenditure. These are timely solutions that
have contributed significantly to the fulfillment
of the state budget revenue and expenditure
tasks in 2017. The successful outcome of the
State budget collection and expenditure in
2017 is the great effort of the Government to
implement the fiscal policy for 2017.
With the state budget estimates in 2018, the
Government, the Ministry of Finance, other
ministries, sectors and localities need to be
determined to overcome many challenges in
order to successfully complete the fiscal year 2018.
Simultaneously, in order to well implement the
fiscal and budgetary tasks in 2018, it is necessary
to closely monitor the socio-economic situation,
timely and appropriate solutions of the Ministry
of Finance to advise the Government on the
direction of implementation.
References:
1. Ministry of Finance (in years), Estimation and Balance of State Budget;
2. Vu Sy Cuong (2012), “Relationship between estimation and
implementation of State budget in comparison to inflation”, Banking
Journal No.2/2012;
3. IMF (2017), Seeking Sustainable Growth: Short-Term Recovery, Long-
Term Challenges – World Economic Outlook Report, Dec. 2017;
4. Sargent, Thomas J. and Neil Wallace. 1981. “Some Unpleasant
Monetarist Arithmetic.” Quarterly Review of Federal Reserve Bank of
Minneapolis, pp. 28p;
5. Some website: mof.gov.vn, mpi.gov.vn, tapchitaichinh.vn...
Annualgrowth rateofestimated
statebudget revenue
Annualgrowth rateofdomestic
estimated revenue
Thegrowth rateof the totalestimated
statebudgetexpenditure
Thegrowth rateofestimated
recurrentexpenditure
FIGURE 2. CHANGES IN ANNUAL STATE BUDGET PLAN FOR
2013-2018
Source: Calculated from figures of yearly - estimated state budget
