April, 21 2012 08:58:19

Prime Minister okays new financial strategy

HA NOI — Prime Minister Nguyen Tan Dung approved on Wednesday 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 would reach around 70 per cent of national gross domestic product (GDP) by 2020, while the outstanding bond market would be valued at about 30 per cent of GDP.

The strategy would 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, would be expected to reach 4 per cent of GDP by 2020.

By improving the relationship between savings and consumption, meanwhile, savings were targeted to reach 33.5-35 per cent of GDP by 2015. Foreign reserves would equal 0.8 or 1 per cent of GDP by 2015.

Public debt, including Government debts, debts guaranteed by the Government and municipal debts, would not be allowed to exceed 65 per cent of GDP, while the nation's total revenues from taxes and fees are planned to account for 22 – 23 and 21 – 22 per cent of the GDP during the two periods of 2011-15 and 2016-20, respectively.

The State budget deficit would be held below 4.5 per cent per year by 2015 and and 4 per cent by 2020.

By that time, the country would 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 would be reformed to ensure that they would be able to cover living expenses in a middle-class society.

The financial strategy, with a vision to 2030, would be carried out in two phases in co-ordination with five-year budget plans to 2015 and 2020. — VNS

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