Vietnam spends over US$2.2 billion in state budget for Covid-19 fight so far

The Vietnamese government has so far earmarked VND52.6 trillion (US$2.24 billion) in the state budget for the fight against the Covid-19 pandemic, according to the Ministry of Finance (MoF).

Illustrative photo.

The MoF said the fund included payments for healthcare workers and staff on the front line of the Covid-19 pandemic fight, expenses for people under quarantine and those directly affected by the pandemic, as well as for purchasing of medical equipment and medicines.

Upon breaking down, the largest portion of VND36 trillion (US$1.53 billion) was provided to support people that are out of work, social assistance beneficiaries or having their income significantly reduced as a consequence of the pandemic.

The government set aside another VND9.5 trillion (US$405.3 million) to purchase medical equipment and medicines against the pandemic, while the remaining of around VND6.7 trillion (US$285.83 million) was to cover various expenses for health workers, staff and people undergoing mass quarantine.

According to the MoF, the pandemic is causing negative impacts on state budget revenue, however, the ministry is committed to providing sufficient funds for capital expenditure and social welfare.

Among measures to boost economic growth, the government has considered public investment a key priority. This year, the public disbursement target is set at VND700 trillion (US$30 billion), more than double the actual disbursed amount of VND312 trillion (US$13.3 billion) in 2019.

The MoF suggested in case when the pandemic ends in this quarter, GDP growth comes in at 5.3% and oil prices average at US$35 per barrel, the state budget may lose VND130 – 150 trillion (US$5.54 – 6.43 billion). The losses would be bigger in case GDP grows at less than 5%, especially from revenue drop-off in services, tourism, trade, and logistics in major cities of Hanoi, Ho Chi Minh City, Danang, Quang Ninh and Hai Phong, among others.

In the first quarter, state budget collection stood at VND391 trillion (US$16.68 billion), equivalent to 25.9% of the estimate and up 1.8% year-on-year. However, since March and with growing impacts of the pandemic, the revenue suffered a sharp decline, particularly from trade activities.

The MoF stated it aims to balance state budget via the implementation of a series of measures, including pushing for speedy privatization and divestment processes of state firms; further cutting regular spending, particularly in meetings and working trips abroad in the remaining nine months.

Notably, the MoF revealed it is seeking loans at low interest rates from international organizations such as the International Monetary Fund, the Asian Development Bank, the World Bank, or the Japan International Cooperation Agency, among others.