Vietnam’s public debt hits three-year low at 58.4% of GDP

Vietnam’s public debt hit the lowest since 2015 at 58.4% of the GDP as of the end of 2018, much lower than the projection of 63.9% made by the Ministry of Planning and Investment (MPI)  last August, according to the Ministry of Finance (MoF).

According to the MoF, the government debt in 2018 stood at 50% of the country’s GDP, government guaranteed-debt at 7.9%, foreign debt at 46% and provincial government debt at 0.5%. 



All the figures are within the limit and lower than the national financial plan in the 2016 – 2020 period, stated the MoF in its report to the National Assembly (NA). 



The NA’s Finance-Budget Committee attributed the lower debt public ratio to government’s tightened state budget overspending and ongoing debt restructuring efforts that helped ensure the state’s repayment capacity and relieve pressure on public debt compared to previous periods. 



In 2018, the MoF reduced the amount of outstanding government bonds amid growing volatility of monetary and foreign exchange markets. 



Additionally, the average maturity of the government bonds was extended to 12.7 years, while more than 90% of the government bonds have over 10 years in maturity. 



The MoF also stressed the ODA would not be used for inefficient projects and in fields where Vietnam has mastered the technologies. 



Vietnam’s state budget overspending down VND12.5 trillion (US$534.4 million) against the MoF’s previous report to VND191.5 trillion (US$8.18 billion) as of the end of 2018, equivalent to 3.46% of the GDP – lower than the NA’s estimate of 3.7% of GDP. 



Last August, Vietnam’s public debt was projected by the MPI to reach VND3,530 trillion (US$152.34 billion) or 63.92% of GDP by the end of 2018, up from the previous rate of 61.3% in 2017. 



The ministry’s projection for public debt is based on assuming the average economic growth rate of 6.53%, equivalent to nominal GDP of VND5,530 trillion (US$238.54 billion) and inflation rate staying below 4%.