Fiscal Balance, Not So Easy

Latest figures released by the Ministry of Finance estimated Vietnam's fiscal deficit at around VND91bn (US$4.7bn) in 2010, down from a deficit of VND109bn in 2009. The latest figure effectively translates into a fiscal deficit of 4.7% of GDP in 2010, which is closely in line with our forecast of 4.6%. Although the reduction of the fiscal deficit from 6.6% of GDP in 2009 to 4.7% in 2010 appears to show that the Vietnamese government is taking appropriate measures to strengthen its balance sheet, we warn that structural weaknesses in the allocation of the fiscal budget

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