Illustration image. Source: Internet

Deputy Prime Minister Le Minh Khai has just signed Decision No. 412/QD-TTg dated March 31, 2022 approving the "Scheme on National Credit Rating Improvement to 2030".

The specific objective is to achieve a credit rating of Baa3 (for Moody's) or BBB- (for S&P and Fitch) or higher by 2030.

Besides that, the average growth rate of gross domestic product (GDP) for the whole period is about 7%/year; GDP per capita at current prices by 2030 will reach about US$7,500; total social investment averages 33-35% of GDP.

The scheme also aims to control the state budget deficit approved by the National Assembly in the annual state budget estimate and the 5-year national financial plan, striving to reach a state budget deficit by 2030 of 3% of the GDP; public debt does not exceed 60% of GDP, government debt does not exceed 50% of GDP.

Credit Rating Improvement: Building a strong public finance platform

One of the main solutions of the Scheme is to build a strong public finance base, expand the sustainable revenue base to improve debt ratios and promote fiscal consolidation.

Specifically, continue to strengthen a healthy fiscal foundation, focus on improving the score of revenue collection through perfecting the collection policy system in association with restructuring state revenue towards covering all sources of revenue, expanding the revenue base, especially new sources of revenue, in line with reality, integration commitments and international practices.

Besides that, improving fiscal indicators, gradually reducing the state budget deficit, the ratio of public debt and government debt compared to GDP.

At the same time, continue to strengthen the transparency of fiscal policy; to step up the management and administration of budgetary finance in the medium term, ensure synchronization and consistency between the medium-term public investment plan and the national financial plan, and borrow and repay the 5-year public debt; implementing the 3-year state budget-financial plan, the 3-year public debt management program following the provisions of law and international practices; strengthen the application of international good practices in risk management of the Government debt portfolio, ensuring sustainable debt.

Promoting the settlement of the remaining bad debts and assets

Another solution is to improve the structure and quality of the banking sector and state-owned enterprises to reduce the risk of contingent debts to the state budget.

Specifically, strengthening the handling of bad debts, limit ing arising bad debts, continuing to restructure the banking industry, minimizing bad debt risks through measures to increase the capitalization of commercial banks, improving the quality of the bank's assets and loans, improving the ratio of assets and liabilities, speeding up the progress of handling the remaining bad debts/assets.

Along with that, continue to perfect the legal corridor on credit extension, effectively expand credit, focus on production and business fields, priority areas following the Government's policy; and strictly control high-risk areas.

In addition, closely monitor and ensure that all guaranteed Government loans are paid on time; continue to rearrange state-owned enterprises to improve the efficiency of state-owned enterprises after equitization; enhance transparency and disclosure of bank and corporate data to improve the predictability of financial performance.

The ministries, ministerial-level agencies, agencies under the Government, People's Committees of provinces and centrally-run cities and relevant agencies are responsible for directing and participating in the implementation of relevant contents of the scheme; proactively coordinate with the Ministry of Finance in performing tasks related to national credit rating; take responsibility for providing and explaining matters within the assigned functions and tasks.