The capital city is gearing up to cut at least 5% of its regular expenditure, in addition to reviewing the financial situation in order to come up with a plan in order to be more efficient with budget revenue and expenditure management moving forward.

Hanoi is set to cut at least 5% of its regular expenditure
to focus on the epidemic combat

The Hanoi People's Committee Chairman Nguyen Duc Chung chaired an online meeting on April 6 which reviewed the committee’s performance during the first quarter of the year.

A the meeting, Department of Planning and Investment Director Nguyen Manh Quyen reported that, despite the capital maintaining its economic growth during the first quarter, most targets came in lower than during the same period from last year. Indeed, Hanoi’s Gross Regional Domestic Product surged by 3.72%, in comparison to last year's increase of 6.95%, while the total number of tourists fell by 47.2%.

Total social investment reached a figure of VND63.04 trillion, an increase of 5.2%, in contrast to the corresponding period from last year which saw a 10.5% increase, while total outstanding debts soared by 1.8%, with the same period last year enjoying an increase of 2.59%. 

There were 6,350 newly established enterprises that recorded registered capital of VND3 trillion, an annual increase of 1% in terms of newly formed firms and 98% in terms of registered capital.

These results can largely be put down to the complicated developments caused by the COVID-19 epidemic which has had a comprehensive impact on economic, cultural, social, and security activities, affecting the capital’s targets in the process.

Economic growth targets all came in lower than the year before, creating great pressure to fulfill socio-economic development targets as price indexes tend to grow higher each year, especially food prices.

There have been a number of scenarios planned for in terms of managing finances going forward, with the first scenario seeing the epidemic last until the end of the second quarter, causing GDP growth for the entire year to grow at over 5%. 

Therefore, Hanoi has identified three scenarios and ways in which to mitigate the damage caused by the epidemic.

The first scenario sees the epidemic being controlled quickly, with the second quarter regaining its growth momentum and accelerating further into the third and fourth quarters. In this scenario, annual growth is expected to hit 7.5% and ultimately fulfill the yearly target.

The second scenario involves the complete control of the epidemic by the third quarter, with growth continuing to be affected. This could cause difficulties for overall economic growth which is forecast to reach 6.42%, therefore failing to reach the set target.

In the third scenario the epidemic drags out until the end of the year, in which the whole year’s growth rate is predicted to stand at 5.34%, failing to meet the set plan.

In the near future, the City’s People's Committee will focus on reviewing public investment projects and speeding up procedures regarding construction and disbursement in order to implement measures that are capable of maintaining and restoring economic development. This will serve to create more capital resources to be used in stimulating socio-economic development.

It is imperative to ensure social welfare and focus on producing products aimed at preventing the spread of the epidemic such as medical equipment, including ventilators and testing instruments, along with other items like masks, disinfecting chemicals, and pharmaceuticals, Mayor Chung stressed.