Vietnam's public debt has been rising fast over the past years. (Photo: Internet)
The National Assembly (NA) has requested the government to closely control the nation’s public debt, government debt and foreign debt to ensure they stay within the secure limits.
Public debt has recently made headlines as it has grown rapidly, at a rate of 18.6% per year, to 2,347 trillion dong (roughly $110 billion), equivalent to 59.6% of gross domestic product (GDP).
The debt could swell to $120 billion by the end of this year, or 61.3% of GDP, but still below the 65%-of-GDP ceiling.
A number of NA deputies have voiced concerns that the country’s public debt would have already surpassed the permitted cap if debts of state-owned enterprises, insurance companies, commercial banks and infrastructure project were included.
Fast growing public debt will put more pressure on debt payment and may lead to economic instability, according to a NA report which compiled opinions of NA deputies.
According to the Ministry of Planning and Investment, Vietnam’s public debt should be 66.4% of GDP at the end of 2014 if the provision for contingent liabilities were taken into account. Debts of state-owned enterprises, the State Bank of Vietnam and insurance and social security institutions are not calculated. The ministry has even proposed raising the public debt limit to 68% of GDP.