A street vendor on a street in Hanoi. Photo: Internet
The Vietnamese government will have to lower the lid on public debt
to 60% of gross domestic product (GDP
) by 2030, compared to 65% of GDP set for the 2016-2020 period, the Politburo of the Communist Party of Vietnam has dictated in a resolution on securing the national financial security.
Parallel, government debt and foreign debt will be reduced by five percentage points to 50% and 45% of GDP, respectively.
In order to make the targets more feasible, fiscal deficit will be narrowed to 4% of GDP toward 2020 and 3% by 2013, according to the resolution.
The country’s budget overspending was calculated at 6.6% of GDP in 2016, 6.33% in 2014 and 5.5% in 2015, according to Saigon Times.
Regular expenditures, which are meant to keep the administrative apparatus running, will be brought down to 64% of total budget spending, compared to over 70% currently.
Vietnam’s public debt reached 2,680 trillion dong (roughly $120 billion) at the end of 2015, or 62.2% of GDP. The debt grew 18.5% per year on average between 2011 and 2015, three times the pace of the country’s economic growth, according to the Ministry of Finance.