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Prime Minister okays new financial strategy
Prime Minister Nguyen Tan Dung has approved a financial strategy through 2020, under which the stock market will be restructured to ensure a more co-ordinated and balanced development among the stock, bond and derivatives markets.
Under the strategy, total stock market capitalisation will reach around 70 percent of national gross domestic product (GDP) by 2020, while the outstanding bond market will be valued at about 30 percent of GDP.
The strategy will require all markets including financial services markets to be developed in co-ordination with an aim of establishing a healthy national financial system and maintaining financial security and economic stability. The total revenues of the insurance sector, for instance, are expected to reach 4 percent of GDP by 2020.
By improving the relationship between savings and consumption, meanwhile, savings were targeted to reach 33.5-35 percent of GDP by 2015. Foreign reserves will equal 0.8 or 1 percent of GDP by 2015.
Public debt, including Government debts, debts guaranteed by the Government and municipal debts, will not be allowed to exceed 65 percent of GDP, while the nation's total revenues from taxes and fees are planned to account for 22 – 23 and 21 – 22 percent of the GDP during the two periods of 2011-15 and 2016-20, respectively.
The State budget deficit will be held below 4.5 percent per year by 2015 and 4 percent by 2020.
By that time, the country will expect to have in place a uniform tax system in line with international standards while capable of brining in sufficient revenues for the State budget. At the same time, the wage scale for civil servants will be reformed to ensure that they will be able to cover living expenses in a middle-class society.
The financial strategy, with a vision to 2030, will be carried out in two phases in co-ordination with five-year budget plans to 2015 and 2020.
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