Performance on the up as illustrated by budget figures

Binh Son refinery has produced about seven million tonnes of assorted products, photo Le Toan

The government last week reported that in 2022, the total state budget recorded a surplus of $9.67 billion, which is in stark contrast to a figure of about $18.14-18.23 billion predicted just a few months ago.

In 2022, total budget expenditure is estimated to be over $67.93 billion – equivalent to 87.5 per cent of the year’s estimates and up 8.1 per cent on-year.

The budget spending has ensured demands for socioeconomic development, national defence and security, state management, payment of debts, and restoration of production activities in areas affected by natural disasters and the pandemic, the government said.

Meanwhile, the state budget revenue is estimated to have hit $77.6 billion, equal to 126.4 per cent of the year’s estimates and up 13.8 per cent on-year. All kinds of revenues have registered an on-year climb, reflecting recovery in almost all sectors in the economy.

Specifically, domestic revenues hit $61.8 billion, tantamount to 120.8 per cent of the year’s estimates, and up 9 per cent on-year. In addition, revenues from export-import activities in the year stood at $12.17 billion, equal to 140.7 per cent of the year’s estimates and up 29.7 per cent as compared to the corresponding period last year.

According to the General Statistics Office (GSO), the economy’s 12-month commodities export-import turnover is estimated to be $732.5 billion, up 9.5 per cent on-year. Export turnover stood at $371.85 billion, up 10.6 per cent, and the import turnover reached $360.65 billion, up 8.4 per cent. There has been a trade surplus of $11.2 billion for the entire year - which is contrary to the trade deficit of $1 billion that was expected earlier in 2022.

Vietnam consecutively recorded a trade surplus in 2022, at $809 million in Q1, $1.28 billion after six months, $5.7 billion after nine months, and $10.6 billion after the first 11 months. What is more, revenues from crude oil stood at $3.34 billion, equivalent to 273 per cent of the year’s estimates and up 72.5 per cent on-year.

All trade achievements have been thanks to production rebound, consumers’ high spending, and tax reduction and removal under free trade agreements’ commitments, the GSO said.

Surging performance

State-owned PetroVietnam, in an example, reported that in 2022, its total revenue hit $40.2 billion, exceeding 66 per cent of the year’s plan, and up 47 per cent on-year. Its pre-tax profits also increased 60 per cent against that in 2021.

The group contributed $7.3 billion to the state coffers, surpassing by 2.6 times as compared to the year’s plan and up 50 per cent on-year.

PetroVietnam’s exploitation of crude oil exceeded by 24 per cent of the year’s plan, while its production of petrol climbed 12 per cent against the year’s plan and 9 per cent on-year.

PetroVietnam’s Binh Son Refining and Petrochemical JSC (BSR) which is responsible for managing and operating the $3 billion Dung Quat Oil Refinery Plant, is reported to have produced about seven million tonnes of assorted products, with total revenue of nearly $7.2 billion in 2022. The company contributed about $784.7 million to the state budget in the year.

In 2022, the south-central province of Quang Ngai, where the plant is located, reaped a total budget revenue of $1.48 billion, half of which came from BSR. PetroVietnam is proposing that the plant be expanded with another investment of about $1.2 billion.

In another case, Vinacomin also reported that in 2022, it produced 39.4 million tonnes of rough coal; 1.47 million tonnes of alumina – of which 1.45 million tonnes have been consumed. Vinacomin’s revenue is estimated to touch $7.21 billion - up 19.5 per cent on-year, and its total profit is estimated to increase 54 per cent on-year. The group contributed $915.6 million to the state coffers.

New targets

Last November, the National Assembly approved a resolution on allocation of central budget in 2023 – the key legal foundation for making plans on use and management of the state budget for national socioeconomic development next year.

According to the resolution, total central and local budget revenues will be $37.54 billion and $32.92 billion, respectively. Total central budget expenditure will be $56.26 billion. This would mean a central budget deficit of $18.72 billion.

“The government is ordered to promote the financial disciplines and rules, with all violators being strictly sanctioned, and punishments being imposed on those that delay and obstruct the speed of capital allocation and disbursement,” read the resolution. “The responsibility of heads of units will be individualised if their units face delayed disbursement and fail to fulfill assigned tasks.”

According to the Ministry of Finance (MoF), it is calculated that in 2022, the government would have loans worth $29.3 billion. This includes loans for central budget balance of up to $28.1 billion, of which borrowing to offset the central budget deficit was a maximum of $19.6 billion, borrowing to repay the principal did not exceed $8.52 billion, and on-lending was $1.16 billion.

Such loans come from government bond issuance instruments, with the average issuance term may be less than nine years; from official development assistance loans and foreign preferential loans; and from other lawful financial sources or from issuance of government bonds directly to the State Bank of Vietnam.

Also, according to the MoF, the government’s debt repayment was about $14.6 billion, of which the government’s direct debt payment was a maximum of $13 billion and the repayment of on-lending projects was $1.56 billion.

When it comes to the loan and repayment plan of localities, borrowing from the government’s foreign loans and other domestic loans was as much as $1.24 billion. Localities’ debt repayment was $265.7 billion, including principal payment of $158.1 million and interest payment of $107.56 million.

It is also estimated that Vietnam’s public debt at the end of this year will be 43-44 per cent of GDP; the government debt will be 40-41 per cent of GDP; the nation’s foreign debts will be 40-41 per cent; and the government’s direct debt repayment obligation will be about 18-19 per cent of total state budget revenues – lower than the permissible limit of 25 per cent.