Vietnam's foreign debt to GDP ratio in 2017 was 45.2% in 2017, and is projected to touch 49.7% of GDP in 2018 and 49.9% in 2019, nearly reaching the limit of 50% of GDP, according to Nguyen Duc Hai, chairman of National Assembly's Finance - Budget Committee.
Illustrative photo.
|
The cap on government debt is set at 53% of GDP.
Hai said that although the rates are still within the respective limits, they still pose risks to the economy. The Committee requested the government to ensure national financial safety by strictly implementing financial disciplines.
Meanwhile, the country's public debt has been on the decline, going from 62.6% of GDP in 2017 to 61.4% in 2018, and potentially 61.3% in 2019, which are all below the limit of 65% of GDP set by the National Assembly.
In a recent update on Vietnam, HSBC provided a similar forecast on the country's public debt-to-GDP ratio, which could rise moderately to 61.6% this year before going down to 61.4% in 2019, assuming a fiscal deficit of 4% of GDP for both years. This is above the government's target deficit of 3.7% for this year, HSBC stated.
However, if the government is able to meet its target deficit of 3.7% for the year, the report estimated that the public debt-to-GDP ratio could be as low as 61.2% by the end of the year.
Vietnam's public debt by the end of 2018 is projected to reach VND3,400 trillion (US$145.03 billion), while the government debt is VND2,890 trillion (US$123.29 billion).
The Committee expected Vietnam to borrow VND157.13 trillion (US$6.7 billion) in 2018 for principal payment, and VND201.21 trillion (US$8.58 billion) in 2019.
