Despite the challenges and difficulties that persist, opportunities and timing always go hand in hand. The Finance industry will strive to fulfill its mission, especially in areas such as the stock market, insurance, finance-budget, customs, anti-smuggling, and financial institution improvement.
This is the affirmation of Minister of Finance Ho Duc Phoc in an interview about the determination to successfully complete the state finance-budget mission in 2024 on the occasion of the Lunar New Year of Giap Thin.
Minister of Finance Ho Duc Phoc,
Expectations to continue solving the “difficult problem”
Interviewer: Minister, the Finance sector had a successful year in 2023, especially in the effectiveness of countercyclical fiscal policy, significantly contributing to the country’s economic and social development. Looking back on the past year, how do you assess it?
Minister Ho Duc Phoc: Vietnam’s economy has had a “uphill battle” year, recovering to grow and becoming a bright spot in the overall “darkness” of the global economy. This success comes from the right direction and policy of the Party, State, National Assembly, the resolute guidance of the Government, and the determination of ministries, localities, and the efforts to overcome difficulties of the people and businesses. I think this is the success of the “power of unity” of the entire political system and people.
Despite many difficulties and challenges, the Finance industry has fundamentally fulfilled well the assigned tasks, thanks to the effectiveness of the “special policies” implemented under the “unique context”, significantly contributing to overcoming the difficulties and the recovery of the country’s economy and society after the Covid-19 pandemic. Last year, many suggestions also recommended that we strengthen the countercyclical fiscal policy to boost aggregate demand, however, in reality, this policy has been applied by the Finance industry for several years under the consensus of the Government and levels, and fields.
In the context of the economy facing many difficulties, we still allocate billions of dong from increased revenue, savings in expenditure to invest in development; at the same time, we apply measures to exempt, reduce, and extend many types of taxes, fees, charges… that have positively supported economic growth in the past year. We expect the policies of “relief for the people”, promoting the “seed capital” of the State will create momentum for demand, creating a stronger impetus for economic recovery in the future.
Interviewer: In 2024, in addition to the difficult and unpredictable factors from the world, Resolution No. 11/NQ-CP of the Government has clearly stated “domestically, the economy has opportunities, advantages, difficulties, and challenges intertwined, but more difficult and challenging”. For the Finance sector, what are those difficulties and challenges, Minister?
Minister Ho Duc Phoc: In 2024, the global situation will surely continue to have unfavorable effects on domestic economic growth, especially the production and business activities of enterprises and exports and imports. The Government has directed many solutions in the management of state finance-budget in 2024. We are determined to implement resolute and consistent expanded fiscal policies, effectively coordinating with monetary policies.
This means continuing to solve the “difficult problem” of implementing appropriate expanded fiscal policies to both stimulate the economy and ensure stable macroeconomic conditions, control inflation, and ensure national financial security. The Ministry of Finance has conducted research and proposed to continue implementing tax exemption, reduction, and deferral policies. However, the extent of loosening will be carefully, strictly, reasonably, and sufficiently calculated in the short term to achieve the above objectives.
Interviewer: According to the Minister, will this help the Finance industry extend the success of 2023 in this new year of Giap Thin or not?
Minister Ho Duc Phoc: We believe, and expect that, because so far the determination in the guidance and management of the competent authorities has been frequent, continuous, and effective. The conclusion, guidance of the Central Executive Committee, Politburo, Party Central Committee, National Assembly, has thoroughly implemented the motto “Solidarity – Integrity – Flexibility – Innovation – Timely Effectiveness”. The Government, the Prime Minister also requested to thoroughly implement the spirit of the Government’s 2024 Leadership Theme, “Integrity – Responsibility – Proactivity – Creativity – Sustainable Effectiveness”.
I believe that challenges and difficulties still exist, but opportunities and timing always go hand in hand. The Finance industry will strive to fulfill its mission, especially in areas such as the stock market, insurance, finance-budget, customs, anti-smuggling, and financial institution improvement. With the accumulated foundation since 2023 and the previous years, and notably, 2024 has allocated enough resources to implement overall salary reform, it is expected to contribute to helping the economy recover soon and regain its fast and stable growth momentum.
The financial market will continue to transform positively in quality and sustainability
Interviewer: Minister, a very important management area of the Ministry of Finance is the stable, healthy, and sustainable development of financial markets, especially the securities market, corporate bond market, and insurance market, which have experienced many fluctuations. Could the Minister share more about this issue?
Minister Ho Duc Phoc: Financial markets in recent times have undergone many impacts from both objective and subjective factors, from the domestic and international macroeconomic situation. These impacts have made the stock market fluctuate, the corporate bond market, and the insurance market face difficulties and challenges.
However, under the resolute leadership and management of the Government, the coordination of ministries, sectors, relevant agencies, timely and appropriate measures from management agencies, the efforts of businesses, the consent of investors, and the people… financial markets have continued to be consolidated, resolved, handled difficulties, and obstacles in a timely manner to increasingly develop healthily, publicly, transparently, and more sustainably. We have many measures to check, control, inspect, perfect laws, promote transparency, strictness, such as establishing separate corporate bond trading floors…
As with the overall economy, difficulties, challenges, and unknown factors in financial markets still exist this year; however, with the foundation that has been built, the measures that have been deployed, and the proactivity from the early days, early months of management agencies at all levels, financial markets will continue to have more positive changes in quality and sustainability.
Transform diplomatic-economic opportunities into practical efficiency
Interviewer: In 2023, Vietnam’s foreign affairs were evaluated as “achieving important achievements, historically meaningful, and impressive in the overall achievements of the country”. Minister, can you share plans to turn opportunities into practical efficiency after the general success of recent economic diplomacy?
Minister Ho Duc Phoc: In 2023, economic diplomacy continued to be strengthened based on the comprehensive implementation of the 13th National Party Congress’s resolution on “building economic diplomacy serving development, taking people, localities, and businesses as the center.” The Government has also evaluated that economic diplomacy in recent times has made new developments in a comprehensive, practical, and effective manner.
Foreign affairs, especially high-level foreign affairs in the past year, have helped to expand and deepen economic cooperation with many partners, contributing significantly to ensuring macroeconomic stability, major balances, promoting economic growth, boosting imports and exports, attracting new resources, including foreign direct investment (FDI), indirect investment (FII), non-refundable aid (ODA), science and technology…
With the Finance sector, we have focused on this work for many years, especially in the past year 2023, the Ministry of Finance has also had many practical activities at the outset to take advantage of the time when the country’s economic diplomacy was “brilliantly successful”.
Recently, we have had many successes through target indicators of national public debt, Government debt from 43.1% in 2021 to 37% in 2023. Besides, the programs to promote indirect investment in foreign countries have been implemented since 2014. The investment promotion programs have significantly contributed to promoting the potential of the general economy and the Vietnam Stock Exchange (VSE) to the international investment community, attracting financial resources for economic development.
This year 2024, based on experience and positive results achieved in previous years, the Ministry of Finance will continue to build programs to promote indirect investment in foreign countries to promote and attract stronger flows of foreign capital to participate in the VSE; at the same time, strengthen connections, establish, consolidate cooperation with stock exchange management agencies, financial institutions, major global investments.
Within this March, the Ministry of Finance is expected to organize an Investment Promotion Program in Korea and Japan to continue to attract indirect investment into Vietnam.
Interviewer: Thank you very much, Minister!
In 2023, it continued to be a successful year in the control of overspending; at the same time, public debt management was also a bright spot in the implementation of fiscal policy in the past time, evaluated by credit rating agencies and international organizations as sustainable, with many potentials to implement expanded fiscal policies.
The ratio of state budget overspending in 2023 was less than 4% compared to the allowed 4.42% by the National Assembly, public debt was about 37% of GDP, much lower than the ceiling of 60% set by the National Assembly.
The Government debt was about 34% of GDP, much lower than the ceiling of 50%. Moreover, the debt structure was positive, with domestic debt increasing and external debt decreasing.
With the low level of debt at the moment and a favorable debt structure after a period of the Ministry of Finance’s reference to the Government on restructuring public debt, Vietnam has many potentials to borrow public debt to implement loans for major projects, the driving force of the economy, creating the fastest and most sustainable economic efficiency.
