A view of the construction on the East-West National Highway in Ho Chi Minh City.

Lawmakers on Thursday expressed concern over the government’s proposal to expand the budget deficit to a maximum of 8 percent of the gross domestic product (GDP) for 2009, saying it was too high and could hike inflation.

The government has sought permission from the National Assembly (NA) to increase the budget deficit to 8 percent from the earlier limit of 4.82 percent.

Some spending items, such as capital government bond issuance, have not been included in the calculations. Thus, the estimated deficit may be more than 10 percent, Loan said.

Delegate Nguyen Dang Trung suggested the deficit target be lowered because it may be unsafe for the economy.

The government should mobilize resources from other sources like the security funds maintained to cover overseas debts to lower budget overspending and inflationary pressures, he said.

NA representative Nguyen Thi Nguyet Huong said high budget deficit will affect national financial security, so it is necessary to increase collections and reduce overspending.

She said the government and associations should take more measures to help firms, especially small- and medium-sized ones, expand their export markets.

The government, citing the impacts of the global economic slowdown, has proposed the NA lower this year’s export growth target to 3 percent from the previous 13 percent.

Representative Tran Du Lich said the country should limit the deficit at 8 percent of GDP and keep inflation under 10 percent in 2009 to push the economy forward, facilitating its rapid recovery in 2010.

Lich cited examples of many countries reporting their 2009 budget deficit at over 10 percent of the GDP, including the US (11 percent), Japan (10 percent) and India (11.4 percent).

Regarding the government’s stimulus package, delegate Loan said bigger firms are having more opportunities to access the funds and proposed that the government should research ways to help small-and medium-size enterprises.

NA representative Nguyen Ngoc Dao said the government should review operations of firms to avoid misuse of the stimulus package.

Delegate Nguyen Duc Hien echoed Loan, saying many small- and medium-sized firms have not been able to access the government’s 4 percent interest subsidies on bank loans.

Stiff challenge

Regarding the government’s proposal to reduce the economic growth target to 5 percent from the earlier 6.5 percent set for this year, some delegates said even this would be very difficult to reach, in the context of the economic downturn.

Chairman of the NA Economic Commisson, Ha Van Hien told reporters on the sidelines of the NA session Thursday that GDP growth would have to increase on average by 1.3 percentage points every quarter to reach the target of 5 percent for the whole year.

It means the economy has to rise over 7 percent in the fourth quarter, equal to the first quarter of 2008, he said. “It is a high target, and difficult to reach. So we have asked the government to clarify foundations for reaching it.”

Foreign workers

Delegate Dang Ngoc Tung called for relevant agencies to protect local workers.

He noted many foreigners were arriving in Vietnam on tourism visas and staying to work, while locals were facing unemployment.

“This is irrational,” he said.

Reported by Ngan Anh