Public debt under control, finance ministry says
Public debt under control, finance ministry says
The Ministry of Finance said in a report released on Thursday that Vietnam’s public debt, which stood at 56.3% and 54.9% of the nation’s gross domestic product (GDP) in 2010 and 2011 respectively, is under control, according to the Government web portal (chinhphu.vn).
Foreign debt accounted for 42.2% of GDP in 2010 and 41.5% in 2011 while the ratio of government debt was 44.6% and 43.2% respectively. Government debt was 17.6% of State budget collections in 2010 and 15.6% in 2011.
In the strategy for public and foreign debts in the 2011-2020 period, the country looks to curb public debt, including government debt, government-guaranteed loans and municipal debt, at less than 65% of GDP by 2020. Government debt will be curbed at 55% and foreign debt at 50%.
The Government’s direct debt obligations (excluding those loans relent) must not exceed 25% of the annual State budget collections and foreign debt obligations must be below 25% of the turnover of goods and services exports.
According to the Department of Debt Management and External Finance under the Ministry of Finance, the public debt ratio at 54.9% of GDP in 2011 was safe under international standards.
The International Monetary Fund (IMF) and the World Bank in a report on the first half of 2012 put Vietnam’s bad debt at 48.3% of GDP at the end of 2012 and 48.2% in 2013.
In addition, it is safe that the Government’s debt obligations do not exceed 35% of State budget collection. In fact, the ratio ranges from 14-16% each year.
Public debt is expected to rise in the coming years given increasing demand for development and investment, including for infrastructure projects. However, the figure will be restricted at below 65% of GDP by 2015 given a resolution approved by the National Assembly.
The Ministry of Finance is also working toward improving legal documents for better management of public debt.
vietnamnet
