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The government of Vietnam is expected to spend VND29 trillion (USD1.716 billion) to launch investment promotion activities this year.

The Ministry of Planning and Investment has just approved the program, under which, infrastructure development projects, investment promotion conferences will be launched across Vietnam.

That sum includes VND20 trillion sourced from the state coffer and VND9 trillion of fiscal spending for 2008.

The government is seeking approval from the national assembly’s meeting slated in May to issue an additional VND11.5 trillion worth of g-bond to raise funds for investment projects this year.

Analysts said Vietnam’s state coffer deficit could rise this year as the government is enacting a number of policies including tax breaks, increasing fiscal spending to boost growth and investments.

PhD Vu Thanh Tu Anh, director of Fulbright Vietnam said the government is facing tough challenges, a dropping state budget deficit, which is estimated at 10 per cent to 12 per cent of the country’s GDP value this year.

In the first quarter, Vietnam’s budget income dropped 20 per cent to VND86.270 trillion, the Ministry of Finance said.

Earlier, the national assembly had approved the budget income target of VND389.9 trillion, fiscal spending of VND491.3 trillion for 2009.

The Politburo, the most powerful body in Vietnam, has given a nod to the government to revise down GDP growth to 5 per cent and state budget deficit of 8 per cent for this year.

                                                                                                     Source: VCCI News