Vietnam extends budget deficit to $3 billion from Jan-May

• Vietnam spends $2.3 billion to pay back foreign debts during Jan-Apr
• PM: Vietnam targets to control budget deficit, public debt
• Vietnam's Q1 budget deficit widens to $2.1 billion
• Vietnam’s 2015 budget deficit at 6.1 percent of GDP

Budget revenue from January to May hit VND346.2 trillion while budget spending was recorded at VND412.6 trillion.

Slumping crude oil prices have cut budget revenue considerably. Government statistics show that crude-related revenue, which made up 30 percent of the nation’s budget in 2005, fell to 20 percent in 2010 and accounted for about 10 percent in 2015.

Revenue from oil in the first five months of this year fell sharply to VND13.9 trillion, accounting for only 4 percent of the total budget revenue.

Vietnam has spent VND55 trillion so far this year to pay foreign debts, VND64.2 trillion on development projects and VND293.4 trillion on national defense and administrative governance.

The government has managed to mitigate the budget deficit by raising revenue from taxes and the privatization of state-owned firms.

Tax authorities have so far collected VND257.9 trillion in various taxes including corporate and individual income taxes.

Budget revenues from domestic incomes during Jan-May made up for 82 percent of the total revenues.

Vietnam is aiming for a 2016 budget deficit of 4.95 percent of gross domestic product (GDP), the Finance Ministry said.

However, according to Fitch Ratings, the country’s budget deficit is forecast to increase to 6.5 percent of GDP. Fitch said Vietnamese regulators will have considerable difficulty in keeping the budget deficit under 4 percent of GDP from 2016-2020.