Government budget deficit decreased sharply.

The significant reduction in the state budget deficit is due to the recovery of crude oil revenue and revenue from import and export activities.

According to a report by the National Financial Supervisory Commission, as of August 15th, the State Budget deficit was estimated at VND 40,350 billion, a decrease of 63.8%, equivalent to 22.6% of the projected figure.

Specifically, state budget revenue as of August 15th reached nearly 707,000 billion VND, an increase of over 17% compared to the same period last year, equivalent to 58.3% of the projected figure. State budget expenditure exceeded 747,000 billion VND, an increase of 4.5%, equivalent to 53.7% of the projected figure. The state budget deficit is estimated at 40,350 billion VND, a decrease of 63.8%, equivalent to 22.6% of the projected figure.

The reason for the sharp decrease in the state budget deficit is the recovery of crude oil revenue and revenue from import and export activities (increasing by 13.8% and 34.3% respectively; compared to a decrease of 45.1% and 11.1% in the same period of 2016).

Government revenue and expenditure increased during the first eight months, but the budget deficit decreased. Illustration photo: KT

Furthermore, the slow disbursement of capital for basic construction investment, reaching only 127,460 billion VND (36.2% of the budget estimate; compared to 42.1% of the budget estimate in the same period of 2016), and the exclusion of principal debt repayment from the budget deficit calculation from fiscal year 2016 onwards.

It is expected that in the remaining months of the year, state budget revenue will continue to be stable, and the disbursement of capital for basic construction investment will show more positive progress.

According to the report by the National Financial Supervisory Commission, government bond issuance in August was unfavorable, with the bid acceptance rate reaching its lowest level since the beginning of the year.

The sharp drop in demand has led to a sluggish government bond market, with the auction acceptance rate reaching its lowest level this year. The main reason for this is the government's increased credit growth target, causing banks to tend to retain funds for lending rather than investing in government bonds.

According to VOV