Phap Van - Cau Gie Expressway (Photo: VNA) Hanoi (VNS/VNA)– Vietnam’s public debt remains under the ceiling limit, according to theMinistry of Finance.
Truong Hung Long, Director of the ministry’s Department of Debt Management andExternal Finance, said public debt was forecast to stand at 61.4 percent ofgross domestic product (GDP) by the end of this year, down 63.7 percent fromthe end of 2016 and below the ceiling of 65 percent.
Long said public debt slowed down in 2016-18, rising at an average rate of 10percent, compared to the rate of 18.4 percent in 2011-15.
Of public debt, Government debt was expected to account for 84.8 percent,Government-guaranteed debt 14.1 percent and debts of local authorities nearly 1percent by year-end.
Long said public debt was structured towards increasing domestic loans andlong-term loans while easing pressure on short-term payments and loweringborrowing costs in 2016-18.
The Government consistently reduced the dependence on foreign loans, a key movewith Vietnam becoming a middle-income country.
Statistics showed that domestic loans met 76 percent of the Government’scapital demand. The Government’s domestic debt was projected at 60 percent bythe end of 2018 and foreign debt at 40 percent, compared to 45 percent and 55 percentat the end of 2015, respectively.
Vietnam focused on raising capital through issuing Government bonds, accordingto Long.
Long said the percentage of Government bonds of 10-30 year terms increased from16 percent in the 2011-15 period to 86.4 percent in the first nine months ofthis year while bond yields gradually fell from 12 percent in 2011 to 4.5 percent,contributing to lowering borrowing costs for the Government.
Regarding the disbursement of official development assistance (ODA), a total of171.6 trillion VND (7.5 billion USD) was disbursed in 2016-18, leaving a limitof 128.4 trillion VND for 2019-20 period.
Long said that although ODA remained an important capital source, despitedecreasing from 36.6 percent of State investment to 27.8 percent in 2017, dueto the limited budget for development investment while demand forinfrastructure development was huge.
Long said the Ministry of Finance would continue to tighten public debtmanagement and enhance efficiency in using State capital.
In addition, focus would be placed on promoting the development of the domesticcapital market, tightening loans of local authorities as well as foreign debtsof enterprises.
The restructuring of public debt to 2020 and in the next five-year period mustbe implemented with the restructuring of the economy, renovating the growthmodel and improving national competitiveness at the centre, Long said.-VNS/VNA
VNA
