How is the Budget Deficit of Hanoi Capital Addressed?

1. The city's budget is allowed to have a deficit; the city budget deficit is only used for the construction of projects included in the medium-term public investment plan as decided by the City Council in accordance with the provisions of Clause 5, Article 7 of the Law on State Budget.

2. The city budget deficit limit is annually decided by the National Assembly. The specific amount of the city's annual budget deficit is decided by the City Council, but it must not exceed the city budget deficit limit decided annually by the National Assembly.

3. The city budget deficit is covered by domestic loans from issuing local government bonds, re-borrowing from loans that the Government of Vietnam borrows for on-lending to the City, and other domestic loans as prescribed by law. The City is not allowed to directly borrow from foreign sources to cover the budget deficit.

4. The outstanding debt limit (including domestic loans from issuing local government bonds, re-borrowing from loans that the Government of Vietnam borrows for on-lending, and other domestic loans as prescribed by law) of the city's budget must not exceed 70% of the local budget revenues as allocated by decentralization. The local budget revenue is determined based on the estimated city budget revenues decided by the National Assembly for the estimated year. If there is a need to increase the deficit, the City reports to the Government of Vietnam, reports to the Standing Committee of the National Assembly for consideration, and submits to the National Assembly for decision on the city-level budget deficit ratio in the annual state budget estimates.

Decree 63/2017/ND-CP takes effect from July 5, 2017.

- Ngoc Duyen -

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