How is the Ho Chi Minh city’s budget deficit made up for?

1. The city’s budget deficit shall be made up for by domestic borrowed funds derived from issuance of local government’s bonds, on-lending of funds by the Government to the city and other domestic loans stipulated by laws. The city shall not be allowed to directly take out any foreign loans to offset its budget deficit.

2. The limit for the city’s budget deficit shall be subject to the National Assembly’s annual resolution. The amount of the city’s budget deficit shall be decided by the city’s People’s Council but shall not be allowed to exceed the limit for the budget deficit subject to the National Assembly’s annual resolution.

3. The outstanding balance of borrowed fund (including domestic borrowed funds derived from issuance of local government’s bonds, on-lending of funds by the Government to the city and other domestic loans stipulated by laws) as part of the city's budget shall not be allowed to exceed 70% of the amount of revenues in the local budget that is received according to the stated mandate. Local budget revenues shall be identified on the basis of the city’s proposed budget approved by the National Assembly in the budget year.  Where it is necessary to take out borrowed funds to execute important infrastructure projects but the outstanding balance of borrowed fund owed by the city's budget exceeds the limit stipulated by this Clause, Ho Chi Minh city People's Committee shall make a report on this to the Government that then proceeds to present it to the National Assembly’s Standing Committee for its review before filing a petition for the National Assembly’s decision.

View more details at Decree No. 48/2017/ND-CP of Vietnam’s Government, effective from June 10, 2017.

- Ngoc Duyen -

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