State budget to fall 4.6 pct amid drop in crude prices

By Ngan Anh, Thanh Nien News

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Economic development will continue to face difficulties this year due, in part, to falling oil prices. (Photo: Ngoc Thang) Economic development will continue to face difficulties this year due, in part, to falling oil prices. (Photo: Ngoc Thang)

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If oil price remains a steady $60 a barrel this year, the state's tax revenues will fall by around VND43 trillion ($2.05 billion) in 2015 unless significant fees and taxes are imposed, according to the National Financial Supervisory Commission (NFSC).
The drop in oil prices will bring down the state's budget collection by VND37 trillion or roughly four percent of what was collected in 2014.
The drop in prices could cut state revenues by an additional VND6 trillion if import taxes and fees imposed on petroleum products set by early 2014 remain unchanged this year.
Thus, state budget collection will fall by a total of VND43 trillion, or 4.6 percent of the plan set for this year.
Brent crude oil prices slumped 48 percent last year, the most since the 2008 financial crisis, as OPEC resisted calls to cut output amid a battle with U.S. shale producers for market share, according to Bloomberg.
The expected 33 percent drop in the price of oil would correlatively cut the cost of petroleum products in Vietnam, bringing local production costs down three percent and boosting local production and consumption demand, according to the NFSC.
Faced with last year's economic outlook, the NFSC said Vietnam was witnessing signs of economic recovery, improvements in the financial market and budgetary outlook as well as a dip in the risks that local businesses face.
Amid a global economic recovery, Vietnam is expected to see improvements in consumption and private investment. However, the economic development will still face difficulties this year amid a slowdown in exports and lower oil prices, which will deal a blow to the investment necessary for further development.
Vietnam is expected to see a GDP growth of 5.4 percent in the first quarter of 2015. GDP growth target of 6.2 percent set for the whole year is feasible, said the NFSC.

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