Vietnam 's public debt index currently stands at a moderate and safelevel, made up of mainly long-term debt and debt with preferentialinterest rates, according to Government reports.
TheMinistry of Finance confirmed the information against rumours that thecountry's debt stood at a high level in comparison with its GrossDomestic Product (GDP), according to the Chinhphu.vn website.
As of December 31 last year, foreign debt was estimated at 1,042trillion VND (49 billion USD), or 41.5 percent of GDP last year, andwithin the safety limit. Under a National Assembly resolution, Vietnamwill control outstanding public debt at below 65 percent of its GDPby 2015 while Government and national debt is reduced to below 50percent, according to ministry statistics.
The World Bankand International Monetary Fund have recognised that Vietnam 's debtlevels were under control and that the country fell outside the DebtInitiative for the Heavily Indebted Poor Countries (HIPCs) group.
Of the country's total debt, official development assistance (ODA)loans accounted for 75 per cent, with low interest rates in themajority.
Forty-year World Bank loans have 10-year graceperiods with an interest rate of 0.75 percent per year while 30 yearAsian Development Bank loans also have 10 year grace periods, but withan interest rate of 1 percent. Thirty-year loans from the JapaneseGovernment have 10-year grace periods with an interest rate of between 1and 2 percent per year.
Currently, both domestic andoverseas debt has been paid, with no bad debt in existence. Moreover,the borrowing structure has been changed by minimising foreign debt andincreasing domestic debt to reduce dependence on overseas sources.
Compared to other developing countries with the same BB credit rating, Vietnam 's debt index is at average level.
To comply with safety limit objectives related to public debtindicators adopted by the National Assembly, the Ministry of Finance hasimplemented measures to control public debt repayments, amongst others.
The Ministry will continue to manage, supervise andallocate loans towards the development of infrastructure. It willclosely control preferential foreign loans and keep watch on theefficient use of loans and debt payments while minimising State budgetsubsidies.-VNA
TheMinistry of Finance confirmed the information against rumours that thecountry's debt stood at a high level in comparison with its GrossDomestic Product (GDP), according to the Chinhphu.vn website.
As of December 31 last year, foreign debt was estimated at 1,042trillion VND (49 billion USD), or 41.5 percent of GDP last year, andwithin the safety limit. Under a National Assembly resolution, Vietnamwill control outstanding public debt at below 65 percent of its GDPby 2015 while Government and national debt is reduced to below 50percent, according to ministry statistics.
The World Bankand International Monetary Fund have recognised that Vietnam 's debtlevels were under control and that the country fell outside the DebtInitiative for the Heavily Indebted Poor Countries (HIPCs) group.
Of the country's total debt, official development assistance (ODA)loans accounted for 75 per cent, with low interest rates in themajority.
Forty-year World Bank loans have 10-year graceperiods with an interest rate of 0.75 percent per year while 30 yearAsian Development Bank loans also have 10 year grace periods, but withan interest rate of 1 percent. Thirty-year loans from the JapaneseGovernment have 10-year grace periods with an interest rate of between 1and 2 percent per year.
Currently, both domestic andoverseas debt has been paid, with no bad debt in existence. Moreover,the borrowing structure has been changed by minimising foreign debt andincreasing domestic debt to reduce dependence on overseas sources.
Compared to other developing countries with the same BB credit rating, Vietnam 's debt index is at average level.
To comply with safety limit objectives related to public debtindicators adopted by the National Assembly, the Ministry of Finance hasimplemented measures to control public debt repayments, amongst others.
The Ministry will continue to manage, supervise andallocate loans towards the development of infrastructure. It willclosely control preferential foreign loans and keep watch on theefficient use of loans and debt payments while minimising State budgetsubsidies.-VNA
