Vietnam’s 2016 Public Debt Forecast to Touch Ceiling: Report

Tuan Minh

11:38 22/08/2016

BizLIVE - Vietnam’s public debt could total $134 billion by the end of this year, equivalent to 64.4% of GDP, nearing the ceiling of 65% of GDP.

Vietnam’s 2016 Public Debt Forecast to Touch Ceiling: Report

Vietnam's public debt is forecast to continue increasing this year. Photo:

Vietnam’s public debt is projected to mount to 2,993.33 trillion ($134 billion) by the end of this year, or 64.4% of its gross domestic product (GDP), Bao Viet Securities Company (BVSC) has said in a report.
BVSC calculated that the debt would increase by a net 385.37 trillion dong ($17.26 billion) this year, which may stem from the fiscal deficit, government bond issuances and government guarantees.  
The brokerage house’s projections are based on a scenario where the country’s economy would grow 5.8% this year and inflation would reach 4%, compared to the respective 6.7% and 5% targets set by the government.
The country’s public debt could climb to 64.9% of GDP, close to the upper limit of 65% of GDP set by the National Assembly, if its fiscal deficit exceeds the plan by 10%, said BVSC researchers in the report.
The debt-to-GDP ratio could be lower if the economic expansion is stronger than BVSC’s projection.
Accordingly, the ratio will be 64.1% and 63.9% if GDP growth reaches 6.3% and 6.5%, respectively.