Vietnam’s public debts forecast to occupy 62.3 percent of GDP in 2015

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Vietnam’s public debts forecast to occupy 62.3 percent of GDP in 2015

Vietnam’s public debts are projected to make up 62.3 percent of the country’s gross domestic product (GDP) by the end of this year, still within the permitted debt ceiling of 65 percent, according to a senior official from the Ministry of Finance. Truong Hung Long, head of the Department of Debt Management and External Finance under the ministry, said at a conference on public debt in Hanoi on Monday that the Vietnamese government has borrowed around VND360 trillion (US$15.84 billion) annually in the 2010-15 period.

Government-guaranteed loans and local government borrowing during that period were estimated to reach VND93 trillion ($4.1 billion) and VND15 trillion ($660 million) per year.

Long said that foreign loans, which have been used for relending to investment and development projects that can repay punctually, have reached some VND237 trillion ($10.43 billion) during the last five years.

According to calculations by the Ministry of Finance, if a debt swap is excluded, Vietnam is estimated to repay VND141 trillion ($6.2 billion) and VND166 trillion ($7.3 billion) in 2014 and 2015.

Public debt to GDP was estimated at 59.6 percent in 2014 and that will top 62.3 percent in 2015, still within the cap of 65 percent set by the National Assembly, Long said.

Vietnam’s GDP increased 5.98 percent in 2014 compared to 2013 to amount to $180 billion, according to the World Bank.

The Southeast Asian country’s GDP will likely rise over 6.5 percent to $192 billion this year, according to the latest forecast by the World Bank and Asian Development Bank.

Vietnam always ensures proper repayment obligations for due debts every year so that national credit ratings can continue to be strengthened, Long added.

According to the analysis of Dr. Pham The Anh, head of the macroeconomics department under the National Economics University in Hanoi, if based on the official statistics of the government, with Vietnam’s public debts constituting 55.7 percent of GDP, the figure could amount to around $90 billion at the end of 2014.

If the debts of state-owned enterprises (SOEs) were included, the amount could be around $180 billion, Dr. Anh told Tuoi Tre (Youth) newspaper in an interview last year, adding that Vietnam’s public debts often exclude SOEs’ liabilities.

Given projected growth in 2015, Vietnam’s GDP per capita may reach $2,200 by the end of 2015, according to the Vietnamese Ministry of Planning and Investment.