For the first time in 18 years, Ho Chi Minh City, growth engine of Vietnam’s economy will get higher ratio of State budget allocated by the government to deal with Covid-19 impact.
The government plans to approve a 10-year budget plan that will be put in use from next year, allowing the country’s largest city to develop infrastructure and attract more capital from foreign investors, Nikkei Asian Review reported.
The decision came after Ho Chi Minh City Party Secretary Nguyen Thien Nhan sought the government’s approval to increase funds for the city which contributed 27.5% of the nation’s budget between 2011-2019.
The government is expected to increase Ho Chi Minh City’s budget rate, which is the ratio of the allocated amount on the collected budget revenue, to increase to 24% between 2021-2025 and 28% during 2026-2030. Currently, the ratio is 18%.
With the additional capital, the city plans to accelerate large-scale public projects, including 122 infrastructure, road and bridge projects, seeking more than $53 billion in investments by 2030.
Ho Chi Minh City, which has been the country’s economic growth engine over the past three decades, contributes up to 23% of the economy’s gross domestic product.
GDP for the export-led Vietnamese economy grew just 0.36% in the second quarter, down sharply from 3.8% in the January to March period. The International Monetary Fund forecasts that Vietnam’s real GDP growth will drop to 2.7% in 2020 from 7% in 2019, Nikkei reported.
Along with public investments, the city is desperately seeking more income sources, including private and foreign investors.
Source: Nikkei Asian Review