VCN- The Minister of Finance, Mr. Dinh Tien Dung affirmed the above content with the press on the sidelines of the conference on reviewing the Finance - State budget in 2016 and implementing Finance - State budget tasks for 2017.
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|Mr. Dinh Tien Dung speaks to the press. Photo: Huu Linh.|
Please tell us about the results of the financial sector in 2016, Minister?
The growth of the global economy was not as expected, with a lower crude oil price and natural disasters on a national scale impacting on the economic growth of Vietnam. Although the growth of the Vietnam economy was at a high level compared to other countries, it still failed to meet requirements set out by the National Assembly, which had a negative influence on the collection of State budget revenues in 2016.
However, with strong determination and effort, the financial sector coordinated with other sectors at all levels to strengthen the management of State budget revenues. At the end of 2016, the State budget revenues exceeded by 7.8% compared to the estimate, with central budget revenues exceeding by 0.18% and local budget revenues exceeding by 18.6%. This was a great success.
The other areas of the financial sector including institution building, control of inflation, price management, promotion of financial market and insurance market performed well and had a more positive outcome than 2015.
Where is the fundamental reason for the collection of the State budget to accomplish the plan at the last minute, Sir?
In order to deal with difficulties in 2016, the Ministry of Finance directed subordinate units to strengthen the management of State budget revenues at the beginning of 2016 and actively implement a series of solutions from the central levels to local levels in inspection and examination to reduce budget losses and transfer pricing.
Therefore, the management of State budget revenues was better and more transparent, improving investment and business environment as well as reducing arrears and debts.
And were there any special points in operations of restructuring towards transparency of public debts in 2016?
On the issue of transparency, we regularly reported to the National Assembly and the Government on debt figures.
Regarding public debt restructuring, 2016 was the most successful year in recent years. First, the Government requested to raise capital from Government bonds for investment and development. The goal set by the Government was to raise capital for 5 years at the level of 70%, and 30% for a period of 3 years. However, in 2016, we mobilized capital for a period of 5 years at the level of 91%.
Second, the term for capital mobilization on average was 8.77 years for Government bonds in 2016. Thus, the term of portfolio in Government bonds increased by 5.7%. In 2013, the term of the portfolio was 2.9 years; in 2014, the term was more than 3 years; in 2015, the term was 4.2 years, and in 2016, the term was 5.71 years.
Another important issue was interest rates. We mobilized capital with an interest rate of around 6% last year, which was very good, while in 2012-2013, the interest rates of Government bonds reached 12-13%. The mobilization of short-term bonds from 2 to 3 years was paid off. To now, compared to the previous period, the term doubled and the interest rates were reduced by half.
I think that the restructuring of public debts, especially Government bonds in 2016 achieved very positive results, particularly domestic debt accounting for 57% and foreign loans accounting for 43%. Thus, we are moving in the right direction.
How did the fiscal policy coordinate with the monetary policy to ensure the target of inflation last year, Sir?
The coordination between the fiscal policy and the monetary policy was very good in many fields.
Mechanisms and financial policy focused on removing difficulties of enterprises in production and business, promoting the reform of administrative procedures, creating favourable conditions for enterprises’ development.
In market management, especially the capital market, the fiscal policy and the monetary policy coordinated effectively in each session, ensuring the supply of Government bonds at a reasonable interest rate.
We also controlled market prices and core inflation rates smoothly in accordance with the market mechanism under the Government’s management in 2016. Thus, the inflation rate was maintained at 4.74% in line with regulations of the National Assembly.
So, in your opinion, what is the most important goal of the financial sector in 2017?
In 2017, in addition to favourable factors, there may be domestic and international difficulties impacting on Finance - State budget tasks.
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There will be several key tasks in the financial sector, but in my opinion, the restructuring of the State budget, ensuring the safety of public debt in accordance with the Resolution of the National Assembly XII will be the most important task to be implemented in 2017 as well as in the whole term.
By Hong Van/ Hoang Anh