Vietnam's public debt within permissible limit: finance ministry

Source: Xinhua| 2019-06-10 20:12:34|Editor: xuxin
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HANOI, June 10 (Xinhua) -- Vietnam's all public debt indicators were under strict control and fell within the permissible limits set by the country's top legislature as of the end of 2018, according to its finance ministry.

The ratio of public debt to gross domestic product (GDP) was 58.4 percent, compared with the target of 65 percent or below, that of government debt to GDP was around 50 percent, compared with the target of under 54 percent, and that of national foreign debt to GDP was 46 percent, compared with the target of under 50 percent, Vietnam News Agency reported on Monday.

As for foreign debt, over three billion U.S. dollars of official development assistance (ODA) and concessional foreign loans taken by the Vietnamese government was disbursed, making up 21.4 percent of government debt.

ODA loans are expected to decrease and finally end in the next five years, resulting in a shortage of preferential long-term credit resources for investment. To compensate for this source, the government should take out new loans at less preferential conditions, thus interest rate-associated risks will increase.

Nevertheless, the average interest rate on the government's external debt remains at a low level (around 2 percent per annum) as more than 96 percent of loans are ODA or concessional loans, which is an important factor helping keep debt payment to budget collection rate within the safe limit, according to the ministry.