Proactively promote disbursement to accelerate economic recovery

The Government has directed to accelerate the disbursement of public investment capital, continuing to consider this a key task to create a driving force to "accelerate" socio -economic recovery and development.

Construction of the North-South Expressway Project, Dien Chau - Bai Vot section. Photo: HA

Promote disbursement

There is a very new point in the allocation and disbursement of public investment capital in 2024, which is that from the beginning of the year, the story of "requesting to return capital" and "requesting to transfer capital" has taken place.

According to the report of the Ministry of Planning and Investment , by the end of February 2024, 5 ministries, central agencies and 2 localities proposed to adjust and reduce 1,520.7 billion VND to supplement the tasks and projects of other ministries, agencies and localities that need to accelerate the implementation progress. On the contrary, 4 ministries, central agencies and 10 localities proposed to supplement 9,650.8 billion VND for tasks and projects to accelerate the implementation progress.

In previous years, capital review and transfer were often carried out from the end of the third quarter, or even the end of the year, when ministries, branches and localities found it impossible to allocate and disburse annual capital plans in time. Due to the rush at the end of the year, there were situations where capital could be transferred or even cancelled.

The evidence is that at the end of last year, more than VND 3,700 billion of planned capital for 2023 was canceled. The National Assembly Standing Committee did not agree to adjust the capital plan between ministries, branches and localities because "the adjustment period according to the provisions of the State Budget Law has exceeded".

Learning from last year's experience, from the beginning of this year, the work of reviewing and transferring capital has been thoroughly implemented by ministries, branches and localities. The Government also immediately directed the Ministry of Planning and Investment to preside over and coordinate with the Ministry of Finance to continue reviewing and synthesizing the need to adjust the 2024 central budget capital plan that has not been allocated in detail by ministries, central agencies and localities, and submit it to the Prime Minister for consideration and decision before March 31, 2024 to report to competent authorities according to regulations. This ensures that resources are not "wasted" and that there is time to proactively transfer capital, and that localities receiving additional capital also have time to disburse.

Currently, according to data from the Ministry of Planning and Investment, as of the end of February 2024, there is still 33,500 billion VND of planned capital for 2024 that has not been allocated in detail. In addition to the capital of more than 1,520 billion VND proposed to be transferred, the remaining amount, ministries, branches and localities all requested to keep for further allocation in the coming time.

“We have asked these ministries, branches and localities to speed up the detailed allocation process, to promptly disburse in 2024,” said Minister of Planning and Investment Nguyen Chi Dung.

In 2024, capital allocation has also been accelerated. So has disbursement. Therefore, in the first two months of the year, disbursement of public investment capital is estimated at about VND 60,000 billion, equivalent to 9.13% of the plan assigned by the Prime Minister, higher than the figure of 6.97% in the same period in 2023.

Although the figures are positive, in reality, the disbursement rate has not met expectations. To date, there are still 29 ministries, branches and localities that have not yet disbursed the 2024 plan. Therefore, the Prime Minister recently directed to speed up the implementation progress, striving to disburse all state budget capital in 2024.

“Ministries, central and local agencies must continue to consider this a key political task to create momentum to 'accelerate' socio-economic recovery and development, focusing on drastic and effective implementation of solutions to promote disbursement of public investment capital,” the Prime Minister directed.

Accelerating economic recovery

It is understandable why the Government continues to consider public investment disbursement as the driving force to “accelerate” socio-economic recovery and development. The reason is that, among the three traditional growth drivers, including public investment, domestic consumption and export, public investment is the driving force that Vietnam can most proactively “strongly promote” and “renew”.

It is also worth mentioning that, in the regular Government meeting in February 2024, in the face of a series of macroeconomic indicators showing that production and business activities are still difficult, the number of enterprises withdrawing from the market is large (nearly 63,000 enterprises, up 22.5% over the same period), outstanding credit decreased by 1.12% compared to the end of 2023, the demand of the economy is still weak (after deducting the price factor, the total retail sales of goods and consumer service revenue increased by only 5% over the same period)..., the Prime Minister directed to "strongly promote" and "renew" traditional growth drivers, while effectively exploiting new growth drivers from digital transformation, green transformation, circular economy...

In the context of both the export market and domestic consumption being weak, promoting the disbursement of public investment capital is the way for Vietnam to accelerate economic recovery. Therefore, in the Resolution of the regular Government meeting in February 2024, which was issued last week, the Prime Minister directed to continue to remove difficulties and urge the disbursement of public investment, especially for key national projects, including the Ring Road 4 Project - Hanoi Capital Region...

“We expect Vietnam’s GDP growth this year to be 6%, higher than last year’s 5%, creating momentum for Vietnam to regain its pre-Covid-19 growth trend. The main growth drivers will be foreign investment inflows, tourism and a recovery in consumer sentiment,” said Tim Evans, CEO of HSBC.

The key to growth, even the new growth driver, lies in the foreign investment sector and Vietnam's opportunities to attract foreign investment, especially in new fields such as semiconductors, artificial intelligence (AI)...

To effectively exploit new growth drivers, the Prime Minister has directed the Ministry of Planning and Investment to focus on researching, proposing, and promptly implementing preferential policies to attract international investment in the semiconductor and AI sectors; as well as speeding up the construction and completion of the Regional and International Financial Center Project. At the same time, promptly submitting to the Government mechanisms and policies to attract investment in the fields of semiconductor chip manufacturing, hydrogen and green ammonia preparation.

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