Section I 08/04/2007 10:47:00 607

Section I

Socio-Economic and Fiscal performance in 2006

I. 2006 Socio-economic development targets

1. Key socio-economic development targets approved by the 8th session of XI National Assembly

2. Socio-economic performance in 2006

II. Implementation of 2006 state budget targets

1. State budget revenues

2. State budget expenditures

3. State Budget Balance

I. 2006 Socio-economic development targets

1. Key socio-economic development targets approved by the 8th session of XI National Assembly

         - Economic growth rate was of 8%;

         - Added value of agriculture, forestry and fishery would increase by 3.8 %, of industry and construction by 10.2% and of services by 8%;

         - Aggregate exports increased by 16.4%;

         - Aggregate development investments accounted for 38.6% of GDP;

         - Consumer price inflation would be less than economic growth rate;

         - Approximately 1.6 million of new jobs;

         - Reduction of poverty to less than 20% (the new standards readjusted in 2005, this performed rate was 22% in 2005).

          2. Socio-economic performance in 2006

2.1 Estimated GDP of 2006 in comparative price increased by 8.17% compared to the previous year, including 3.4% of agriculture, forestry and fishery together, 10.37% of industry and construction, and 8.29% of services.  In 8.17% growth rate of GDP, agriculture, forestry and fishery together contributed 0.67 %, industry and construction together and services contributed 4.16 % and 3.34% respectively.

Economic structure continued the transition towards increasing of the industry, construction and services, decreasing of agriculture, forestry and fishery.  Industry and construction sectors accounted for 40.97% of production in 2005, increased to 41.52% in 2006; services increased from 38.01% to 38.08%; agriculture, forestry and fishery together decreased from 21.02% to 20.40% in 2006.

Note: Average exchange rate of 2006  is 15.950 VND/USD

2. 2 Production of agriculture, forestry and fishery (fixed price) in 2006 was estimated to increase by 4.4% compared to that of 2005; of which growth rates of agriculture, forestry, fishery increased by 3.6%, 1.2% and 7.7% respectively.

2.3  Value of industrial production in 1994 fixed price was estimated at VND 490.82 trillions, increased by 17% compared to the same period 2005, including 9.1% increase of public sector (SOEs) (the central ones increased by 11.9%; and the local ones increased by 2%); the industrial production of private sector and of foreign invested sector increased by 23.9% and 18.8%  respectively (Oil and gasoline decreased by 6.5% while others increased by 25.4%). A moderate increase in the SOE sector was mainly due to less number of enterprises, especially the local ones as a result of enhanced equitization and restructuring process.

2. 4  Investment

Investments in current price of 2006 was estimated at VND 398.9 trillion, accounting for 105.9% of the total budgeted, including 50.1% from state budget, 33.6% from private sector, and 16.3% from FDI which rates accounted for 103.2%, 105,7%, and 116,1% of the budgeted respectively.

In 2006 FID continued to grow. As of the end 2006, throughout the country 797 foreign invested projects were licensed with total registered capital of USD 7,57 billion, averagely there was USD 9.5 million available for each project. By the gross, newly invested and supplemented capital for investments in 2006 amounted to more than USD 10 billion, which has been the highest level up to now, has become on of the most impressive economic event in 2006. Among registered foreign investment projects licensed in 2006, those of industry and construction sectors accounted for 68.4% while 30% of services and 1.6% of agriculture, forestry and fishery sectors. There were 43 provinces and cities hosting newly licensed foreign investment projects in 2006, of which 12 provinces and cities received the investments of over USD100 million. Thirty three nations and jurisdictions were granted license to invest into Vietnam in 2006.

2.5  Commerce, price and services

Total sales from retails and services in 2006 were estimated at VND 580,7 trillion (in current price), 20.9% higher (or 13% if minus price increase) than that of previous year. This was a relative high growth rate compared to GDP growth rate, reflecting higher increase in purchasing power and consumption of households. By the gross, public economic sector increased by 8.2%; collective, household, private, and foreign invested economic sectors increased by 20.8%, 22.4%, 25%, and 21.5% respectively. By category of economic industry, commerce increased by 19.9%; hotels and restaurants together grew by 22.3%; services and traveling increased by 31.6% and 30.5% respectively.

Consumer price in December 2006 inflated by 6,6% compared with the same period of 2005, lower than GDP growth rate and reached the targeted rate approved by the National Assembly. Compared the same period of 2005, price of all baskets of goods and services was up in December 2006, including the increase by 7.9% of foods and beverage, which was mostly contributed into the inflation of consumer price. Meanwhile, the others increased by the range from 3.5% to 6,5%, excluding the group of post and telecommunication, deflating by 2.9 %. Average price of 2006 increased by 7,5% over previous year, lower than the consumption inflation of 2 consecutive years earlier (average price rose by 8.3% and 7.7% in 2005 and in 2004 respectively).

Gold price in December 2006 rose by 27.2% compared to the same period of 2005. Average gold price in 2006 inflated 36.6% over that of 2005, with surges of 47.6% and 44.5% in the third and fourth quarters respectively. 

Rate of US dollar in December 2006 rose by 1% compared to the same period of 2005. Average rate of US dollar in 2006 increased by 0.9% over the previous year and did not fluctuate much during the quarters, with the range from 0.9% to 1.1%. It was observed that since 2003, rate of US dollar has increased less than that of gold and consumer prices.  

Total value of exports and imports in 2006 was estimated at USD 84.5 billion, increasing by 21% over previous year, of which exports value increased by 22.1%, imports value 20.1%. Trade deficit was USD 4.8 billion, accounting for 12.1% of exports value (the respective of 2005 were USD4.54 billion and 14%).

Exports turnover in 2006 was estimated at USD 39.6 billion, 4,9% higher than planned value of the year, of which USD 16.7 billion, increasing by 20.5% over previous year, of the domestic economic sector contributed significantly to the overall exports growth of 39.8%. Exports by foreign invested sector excluding crude oil reached USD 14.5 billion increased by 30.1%, contributing 46.9% into the overall growth; exports value of crude oil reached USD 8.3 billion, increasing by 12.9%, sharing 13.3% in overall growth. In 2006, rubber and coffee joined the group of goods with turnover of more than USD 1 billion, raising the number of the group members up to 9. Among this group, there were 04 major traditional goods, including crude oil, textile, shoes and fishery, which averagely reached the annual turnover of more than USD 3.3 billion. In 2006, export turnover of selected agricultural products heavily increased due to adequate developments and high world price. In this group, export of rubber obtained the highest growth (+58.3%), coffee export value increased by 49.9% but rice export decreased both in terms of turnover and volume due to the limited supply. 

Goods import turnover in 2006 was estimated at USD 44.9 billion, increasing 21.4% over the year 2005. The public sector (SOEs) contributed USD 27.99 billion, increasing by 19.9%, which contributed 62.6% into overall growth; Imports by the foreign invested sector reached USD 16.42 billion, increasing 20.4%, which contributed 37.4% into overall turnover growth.

Compared to the previous year, imports of machinery, equipment and most of the materials all increased. Especially, imports of major materials, excluding petroleum, raw steel and urea, increased heavily. Import turnover of machinery and equipment increased by 24.1%. Petroleum import turnover reaching USD 5.8 billion increased by 16.4% but imported quantity decreased by 3.8%. Imports of fertilizers, plastic, chemicals, papers, and clothing increased by 5.1%, 26.8%, 18.6%, 30.5% and 23.1% respectively. However, imports of textile and leather materials and accessories decreased by 14.1% and continued to go down due to increase of domestic substitutes. Import turnover of iron and steel reaching USD 2.9 billion decreased by 0.9%, with increase in volume 1.8% due to lower price.

Exports value of services in 2006 was estimated at USD 5.1 billion, increased 19.6% compared to that of 2005, of which selected services were in high turnover and grew by more than 20% such as tourism (23.9%), air transportation (35.5%), maritime (27.5%), financial services (22.7%). Imports of services in 2006 was estimated at USD 5.12 billion USD, increasing by 14.3% over the previous year, of which tourism increased by 16.7%, charge of issuance (at CIF price) and forwarding which accounted for 33.7%, increasing by 20.1%. Trade deficit in 2006 was only USD 22 million (it was USD 220 million in 2005).

In 2006, transportation was estimated to reach 1386.6 million passengers and 58.7 billion passenger-km, increasing by 9.1% in terms of passengers and 10.2% in terms of passenger-km compared to those of 2005. In land transportation accounted for 85.7% total enrolments, increasing by 10.1%. Waterway, airway, and maritime increased by 4.3%, 15.5% and 11.1% respectively. The number of passengers increased mainly by in-land and airway transportation. However, railway transportation decreased in terms of both number of passengers and passenger-km.

Forwarding and shipping in 2006 was estimated to reach 350.4 million tons and 88.6 billion ton-km, increasing by 8.1% in terms of tons and by 9.3% in terms of ton-km compared to those of 2005. Both central and local, domestic and international forwarding and shipping increased in terms of both tons and ton-km, disregarding transportation means.

In 2006, the number of international visitors coming to Viet Nam was estimated to reach to 3,6 million , increasing by 3% compared to that of 2005. However, that number was not sufficient as expected and relative low compared to 18.8% of increase in 2005, mainly due to 28% decrease of tourists from China. In addition, numbers of visitors from the countries such as Cambodia, Laos, Philippines and Indonesia all decreased by the range from 7.7% to 22%. By tour purpose, tourists accounted for 57.7%, increasing only 1.5% compared to that of 2005; visitors for business purpose increased by 16.2%; visitors for meeting family or relatives increased by 10.4%; however, visitors for other purposes decreased by 13.1%. Number of visitors from South Korea, United States, Japan, Australia, Thailand and Singapore reached over 100 thousand and continued to keep a high growth rate.

2.6  Social affairs

Population in the year 2006 was estimated at 84, 11 million, including 41.33 million males and 42.78 million females,  increased by 1.21% over that in 2005 (population growth rate in 2005 was 1.31%). Urban population reached 22.82 million, increasing heavily due to rapid urbanization in recent years, making up 27.1% of national population in 2006. Rural population reached 61.29 million.

- Labor and employment:  As of 1st July 2006, the employees at the age of 15 or more working in the economy, were estimated at 43.44 millions, increasing by 2.1% compared to the same period of the previous year. The ratio of employees in the sectors of agriculture, forestry and fishery continued to slow down from 57.2% in 2005 to 55.7% in 2006 for transferring to different sectors with higher productivity, towards industrialization and modernization. Respectively, proportion of employees in the industrial and construction sector continuously increased from 18.3% to 19.1%, the services sector from 24.5% to 25.2%. Among  sectors, public sector has a slight increase of employees compared to the previous year. Unemployment rate of urban areas continued to slow down, reaching 4.4%, of those 4.8% was of  males and 3.9% of females.

- Living standard of households: Generally, livelihood of households was stable. Living standard of cadres, public officials and stipendiary was significantly improved  along with the roadmap of salary reform. In the rural areas, livelihood of most farmers was stable and gradually improved as production growth and higher price of several agricultural produce and foods. Poverty rate of country as a whole and several regions continued to be eliminated, with considerable reduction of next-to-new crop hungry periods compared to 2005. However, gaps of labor income among industries, regions and higher prices of several consumer goods had negative impacts to the livelihood of certain groups of the low-income employees and inhabitants in the areas affected by natural disasters, crop plague, and livestock diseases.

- Training and education: In the new school year of 2006-2007, nationwide there were 476,4 thousand children going to crèches, increasing by 5, 4% than that of last school year and accounting for 10.2 % total number of children at the age of 0-2years old. The number of enrolments in kindergarten were 2.4 million, decreasing by 0.7%,accounting for 57.5% total children at the age of 3-5 years old. The enrolled pupils at primary school level were 7 million, decreasing by 3.6%. At junior secondary school and senior secondary school levels the number were 6.2 million and decreased by 2.3%, and 3.1 million and increased 4.5% respectively.

Nationwide there were 349.4 thousand of primary school teachers, 305.7 junior secondary school teachers and 123.4 senior secondary school teachers.

          II. Implementation of 2006 state budget targets

           At the 8th Meeting Session, the XI National Assembly has promulgated the Resolution No. 47/2005/QH11 on fiscal budgeting and planning in 2006 with total balance revenue of VND 237,900 billion and total balance expenditure of VND 294,400 billion, including VND 8,000 billion of brought forward revenues from 2005 to 2006; budget deficit is at VND 48,500 billion, accounting for 5% of GDP.

2006 state budget targets were implemented in favorable conditions such as high economic growth, positive transition of the economic structure, achievements of international integration. However, there were still negative factors such as unfavorable weather, which caused difficulties for agriculture and livelihood; bird flue with threat to come back; onychoschizia of livestock flaring with unpredictable developments; higher price of petroleum and other important materials in the world markets causing a pressure to raise price of inputs, affecting to productivity and competitiveness of products.

However, with the efforts by all industries, enterprises and finance industry in order to implement the policy measures to control diseases, to minimize the consequences of natural disasters, stabilize price, to enhance management, inspection and examination in increase of effectiveness of budgetary expenditures, avoidance of waste and leaking of capital, the budget performance …., those of  above targets of socio-economic development and fiscal policies of 2006 were ahead of schedule. Fiscal performance of 2006 would be evaluated as follows:

1. State budget revenues

Budgeted balance revenue was VND 237,900 billion, the implemented revenues estimatedly reached VND 264,260 billion, 11% higher than budgeted number for this year (VND 26,360 billion), increasing by 21.7% compared to the performed figure in 2005. Domestic revenues were estimated at VND 137,539 billion, over the planned figure 4.2% (VND 5,539 billion), increasing by 19.4% compared to the implemented in 2005; revenue from crude oil was estimated at VND 80,085 billion, over the budgeted target by 26,3% (VND16,685 billion), increasing by 30,1% compared to the implemented in 2005; Net revenue from export-import activities was estimated at VND 42,900 billion, 7.2% higher than the budgeted number (VND 2,900 billion), increasing by 12,9% compared to the implemented figure in 2005. Some major points were detailed as follows:

1.1  Domestic revenue, excluding crude oil: the budgeted number was VND 132,000 billion, the performed was at VND 137,539 billion. Since early this year, industries and administrative agencies have put more efforts into tax collection management, striving to speed up collection of bad tax debts and carrying out inspection and examination for more efficient budget collection. At the same time, enterprises were guided to implement seriously the income statements and to pay off full the corporate income tax amount. Therefore, overall budget revenues and several important revenues have reached or outmatched the specified targets, though there were unfavorable conditions. Details are as follows:

1.1.1. Revenues from state sector (State-owned enterprises-SOEs) were estimated at VND 46,119 billion, increasing by 9.2% (VND 3,876 billion) compared to the budgeted target and 18.5% higher than that of 2005, accounting for 17.5% total budget revenues. Given much higher price of several important inputs such as petroleum, raw steel, and clinker, which causes higher costs and less reserves, however, lots of state-owned groups and corporations still efficiently fulfilled their business tasks and outmatched the assigned levels of budget revenue delivery in the year 2006. This owns to the improvements in manufacturing process, cost efficiency and enhanced competitive advantages.

In the year 2006, ministries, municipalities, state owned groups and major corporations focused on reviewing and adjusting of SOEs rightsizing process. In addition, the blooming securities market and policy improvement to encourage investment into securities sector have become a strong momentum for the SOEs to push forward their equitization process. For the year 2006, more than 500 SOEs have been fully or partly equitized and restructured. Among them, there were 300 equitized SOEs, making up 45.5% plan approved for two years of 2006 and 2007. After equitizing, almost corporations are expanding their business operations. However, effectiveness and competitiveness for existence and development of the SOEs in the context of international integration are still limited.

1.1.2 Foreign-invested sector: Total newly licensed and supplemented FDI was estimated at over USD 10 billion. However, in 2006 this sector was seriously affected by sharp reduction of inland fitting-up car sales, which resulted in the revenues of this sector achieved VND 24,218 billion only, 87.1% equivalent to (decreased by VND 3,589 billion) the budgeted target. However, budget revenues from this sector still increased by 26.9% compared to those of the year 2005, accounting for 9.2% of total revenues.

1.1.3. Private Sector: For year 2006, revenues from this sector were estimated at VND 21,880 billion, increased by 6.0% (VND 1,230 billion) over the budgeted and 29.3% compared to those of 2005. There was about VND 127 trillion of investments by households and private sector into the economy in 2006, accounting for 32.5% total investments and making up a significant contribution into economic growth, jobs creation and poverty reduction. Private sector also maintained the highest growth rate of industrial production, which accounted for 21% compared to 9,1% of the public sector, 18.6% of the foreign-invested economics sector and 17% of overall growth of all sectors.

1.1.4.  Revenues from land and housing: In the year 2006, real estate market was stagnant with lower price. However, many municipalities have reached or outmatched the budgeted land user right assignment revenues, owning to efficient land auctions and settlement of bottlenecks in granting of land user right. Overall, revenues from land user right assignment in 2006 reached VND 15,051 billion, increasing by VND 1,051 billion compared to that of the budgeted target. Total capital revenues (revenues from sales of state-owned houses and land user right assignment) were estimated at VND 19,702 billion, increasing by 18.3% (VND 3,052 billion) compared to that of the budgeted target, and 15.3% higher than that implemented amount in 2005.

1.1.5 Local revenues by municipalities: Municipalities have put more efforts into implementation of policy measures to fulfill the socio-economic development plan and fiscal assignments in 2006, especially there have been strong focuses of facilitation of business and production by enterprises, creating more revenues for the state budget. Besides, tax collection management is attached with high importance, with the efforts of the municipalities to coordinate efforts of different regulatory and administrative units in order to deal with the breaches and violation of legal frameworks on taxes. Therefore, most of provinces and central cities estimatedly reached or outmatched the revenue targets assigned by the Prime Minister for 2006.

1.2  Revenues from crude oil: These revenues were budgeted by VND 63,400 billion. However, estimates reached VND 80,085 billion, over the target by 26.3% (VND 16,685 billion).

After enjoying continual increasing during 9 early months of the year, since October 2006 world price of crude oil has experienced a persistent downtrend. However, the average price of crude oil exported was USD506/ton (approximately USD 66/barrel), increasing by USD 71.2 /ton (USD 9.3 /barrel) over scheduled price. Output of crude oil for the year was estimated at 16.7 million ton, increasing by 1.8 million tons compared to the budgeted target.

1.3 Net revenue from export-import activities: this revenue was budgeted at VND 40,000 billion, but its estimate reached VND 42,900 billion for the year, increasing by 7.2% (VND 2.900 billions) compared to the budgeted number.

In the year 2006, export turnover was estimated at USD 44.9 billion, increasing by 21.4% compared to that of 2005. In composition of imports in 2006, shares of almost machinery equipment and materials for domestic production increased over the previous year, including 24.1% of machinery equipment, 16.4% of petroleum, 5.1% of fertilizers, 26.8% of plastic, 18.6% of chemicals, 30.5% of papers, and 23.1% of clothing... Tax rates of several items in the import tariffs frame were reduced to facilitate integration commitments. Tax rates of imported petroleum were also flexibly adjusted by fact conditions, which stabilized the domestic market prices in the condition of up-ward world prices. Reimbursement of value added tax was implemented stringently, in conformity with regulations and actual export turnover. Besides, administrative reforms were strengthened, facilitating operation of enterprises, reducing cost efficiency and saving time. In addition, post-clearance customs examination has been strengthened to prevent and fight trafficking and trade frauds. A mechanism of reference to the world price is used for types of goods which are similar to the ones in the international market to fight against tax avoidance through imports price, especially for such imports as second-handed autos, electronic items and computers.

1.4  Revenues from grants: grants were budgeted at VND 2,500 billion, but the estimate reached at VND 3,618 billion, increasing by 44.7% (VND 1,118 billion) over the budgeted target.

Totally, budget revenues in the year 2006 was estimated at VND 264,260 billion, outmatching the budgeted by 11,1%, mainly by an increase of crude oil revenues due to higher price. Domestic revenues and net revenue from export-import activities all reached or outmatched the budgeted targets, partly owning to business and production development, and partly due to flexible adjustment of import duties on petroleum as well as enhancement of revenue collection management to prevent revenue losses and bad tax debts. Budget revenues accounted for 23.0% of GDP, including taxes and fees of 21.2% GDP[1], and reached the target set out by the Resolution of National Assembly on the Five-year Socio-Economic Development Plan for the period of 2006-2010. If the increase of crude oil revenues due to its higher price was included, the revenue proportion was 27% of GDP. By composition, domestic revenues accounted for 52% of total revenues; net revenues from import-export activities, and crude oil maker up 16.2% and 30.3% respectively. Revenues structure has been transited towards a positive status of increasing the proportion of domestic revenues.

2. State budget expenditures

Total expenditures were budgeted at VND 294,400 billion, but estimates reached VND 321,377 billion in the year, outmatching the target by 9,2% (VND 26.977 billion), increasing by 20.9% compared to 2005. Details are as follows:

2.1  Expenditures on investment development: these expenditures were budgeted at VND 81,580 billion, but estimated to reach VND 86,084 billion (8.8% of GDP), outmatched the target by 5.5% (VND 4,504 billion), and increased by 19.6% compared to 2005. Capital expenditures was estimated at VND 81,730 billion, outmatched the target by 5.4% (VND 4,220 billion), and increased by 19.5% compared to 2005.

Adequate expenditures on investment development in 2006 have ensured the progress of national projects, investments for traffic system, irrigation projects to protect against flood, and infrastructure projects in the Mountainous Northern, Central provinces as well as Central highlands and Western provinces of the South of Vietnam. Capital expenditures were spent more on healthcare, education, culture development, and poverty reduction programs. Besides that, to implement the Resolution by the National Assembly, in 2006 the Government issued VND 10,666 billion of government bonds for investment in some important irrigation and traffic projects. If these investments are included, total expenditures on investment development in 2006 were VND 96,750 billion, accounting for 9.9% of GDP. By these investments, several important highways such as Ho Chi Minh highway, the National highway No.6, the National highway No.32, and the northern border ring-road system were put into operation to serve well implementation of the tasks of socio- economic development, national defense and security.    

2.2. Repayment for Debts and provision of aids: these expenditures were budgeted and implemented at VND 40,800 billion in the year 2006. Due debts were all paid off timely. All committed aids were provided fully in accordance with International Agreements.

2.3 Expenditures on development of education, healthcare, culture, social subsidies, defense, security, public administration, public organizations: These expenditures were budgeted at VND 154,670 billion[2], estimated to reach VND162,645 billion, outmatched the target by 5.2% (VND 7,975 billion), increased by 19.5% compared to 2005. Fiscal management has been done well to ensure the progress of budgeted expenditures. Besides, other important tasks have been efficiently fulfilled, including the fighting against consequences of drought and floods caused by storms; spending in protection against relapse of bird flu epidemic and termination of the onychoschizia of livestock; subsidizing the expenditures for APEC events in Viet Nam; providing enough money for increase of a minimum salary to VND 450,000 /person/month since 1st October 2006.

Regarding to enforcement of the Anti-corruption Law and Law of Economicality and Anti-Waste Practices, the financial agencies have strengthened management and utilization of fiscal capital and public assets, focusing on inspection of expenditures for meetings, conferences, business trips and study tours. Using of state budget for presents, lobbies and gifts has been controlled well. Economicality in buying cars for public using in 2006 has been maintained stringently. 

2.4  Expenditures on oil subsidies to stabilize domestic prices: the world oil and gasoline markets in 2006 had unexpected moves with harsh and sudden turbulence, causing strong upward pressure on domestic price and negative impacts to business, production and livelihood of households. Given higher world oil price, to stabilize the domestic petroleum and gasoline market, Government decided to make up the losses from imported oil by VND 8,700 billion for major importing enterprises. Besides, a roadmap for transiting the oil pricing management towards a market-based mechanism is being considered to be implemented, first to reduce and then to stop the expenditures on loss making-up for imported oil in time.

3. State Budget Balance

Budget deficit in 2006 approved by the National Assembly was planned at VND 48,500 billion, accounting for 5% of GDP. In fact, it was VND 48.500 billion, accounting for 4.98% of GDP, and financed by domestic and international borrowings of VND 36,000 billion and VN 12,500 billion respectively.

In conclusion, for the year 2006 fiscal performance has been quite good with important achievements, creating a strong momentum for implementation of the Five-year socio-economic development plan for the period of 2006-2010 set up by the Resolution of National Assembly. These achievements include: revenues outmatched the target by 11.1%, increasing by 21.7% compared to the previous year with favorable transition in revenue structure; Expenditures are well managed with adequate restructure. Well budgeting, contingency planning and revenue enhancement have allowed more expenditures for important investment projects of national defense, security, education, health care, culture, social development, dealing with consequences of natural disaster, diseases, and poverty reduction; Expenditures on salary reform policy and subsidies for policy preferred families and revolutionary meritorious people were ensured; the losses from imported oil and gasoline products were offset by state budget to stabilize manufacturing costs and consumer price; Budget deficit was kept at 4.98% of GDP, maintaining fiscal security and reserving enough back up resources for 2007 budget as well as more expenditures on salary reform policy under the Resolution of  the National Assembly.

[1] Excluding increased revenues from crude oil owning to higher selling price.

[2] The budgeted number includes expenditures on reform of salary policy in conformity with the Decree No. 93/2006/N�-CP and Decree 94/2006/N�-CP of the Government.