Each Vietnamese to bear additional US$180 of public debt by year end
From now until the end of the year, total public debt could reach VND3,000,000 billion (US$134.5 billion) and each Vietnamese will shoulder an additional VND4 million (nearly US$180) of public debt.
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"The total public debt" includes direct loans of the central and local governments and loans guaranteed by the Government.
According to recently updated data of the Ministry of Finance, the public debt ratio by the end of 2015 was equivalent to 62.2% of GDP, reaching over VND2,600,000 billion (US$116.6 billion).
A monthly specialized report in August 2016 on Vietnam’s public debt said that public debt may reach 64.4% of GDP by the end of this year, which will be close to the public debt ceiling allowed by the National Assembly until 2020.
The total debt will increase by VND385,375 billion, to nearly VND3,000,000 billion. On average, from now to the end of the year, each Vietnamese citizen will bear an additional VND4 million debt.
This result is calculated based on a government decision on debt payment and borrowing plan in 2016, under which the Government plans to borrow an additional VND452,000 billion to cover the debt, including VND95,000 billion for debt swap and VND85,000 billion for guarantee payment.
The pressure to increase total public debt comes from multiple sources, such as budget deficits, government bonds, government loans and guarantees by the Government. However, the budget deficit is still the main factor.
Analysts noted that the situation could be more optimistic if Vietnam obtains GDP growth rate of 6.3% or 6.5% this year.
If these figures are true, the ratio of public debt/GDP could be lower than that of 2016, at 64.1% (if GDP growth rate is 6.3%) or 63.9% (with growth rate of 6.5%).
However, the budget deficit is actually often higher than estimates, so the ratio of public debt/GDP cannot exceed the ceiling even when the GDP growth rate is 6.3% or higher.
