Government reports on public debts
18:19 | 02/11/2012

VGP – As of December 31, 2011, the total public debts amounted to over VND 1.391 trillion (US$69.5 billion), accounting for 55.4% of GDP and down 1.9% against 2010, according to a Government’s report to the National Assembly.   

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Viet Nam has so far been assessed as one of the countries with debt rate putting under control. It  was excluded from the list of heavily indebted poor countries (HIPCs).

The tight fiscal policies, lower state budget overspending and prioritized capital for public debt payments were mainly attributed to the decline in total public debts in 2011 in comparison with 2010.

The borrowed loans play an important role in the country’s development, macro-economic stability, and its realization of industrialization and modernization.

The Government’s direct debts accounted for 78% of the total public outstanding and 43.1% of GDP.

Meanwhile, the Government’s guaranteed loans made up around 21% of the total public outstanding and 11.7% of GDP; local authority loans around 1% and 0.5%. 

Japan is the biggest creditor of Viet Nam by occupying 17% of the Southeast Asian country’s loans; followed by the World Bank 13%; the Asian Development Bank 8%. 

A majority of foreign loans are long term with preferential interest rates.

However, experts projected that public debts will expand in 2012 and the following years due to higher demands for socio-economic infrastructure construction and lower GDP growth rate.

Public debt is estimated at VND1,632,309 billion (US$ 81.6 billion) in 2012.

The Government targets to keep the public debt rate below 65% of GDP by 2015 in which its outstanding will not surpass 50% of GDP and foreign debts under 50% of GDP.

Government bonds worth of VND 225 trillion (US$11.25 billion) will be issued to draw in capital for public works on the transport, irrigation, healthcare and education sectors in the next three years.

The Government will ensure the ratio of foreign reserve and annual short-term outstanding to over 200%.

To effectively use and control public debts, the Government will provide open and transparent information on the mobilization, distribution, spending and payment of foreign loans.

The Government will also continue to perfect institutions, policies and tools to manage foreign debts and ODA and issue the policy mechanism on PPP, BOT, BTO, BT to engage social involvement./.

By Huong Giang

 

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