Vietnam’s 2011 public debt fell 1.9 percent over 2010 to 55.4 percent of the country’s gross domestic product (GDP), according to a Government report.
The reduction was attributed to the government’s efforts in implementing a tight fiscal policy, cutting budget spending, as well as the National Assembly’s allocations of annual budget revenue for government expenses.
The report, recently presented to the ongoing National Assembly session, said that foreign loans played a crucial role in national investment, making a significant contribution to stabilizing the macro economy, improving Vietnam’s position globally, and realizing the national modernization and industrialization plan.
Thus, Vietnam is among countries that have public debt under control (below 60 percent of GDP) and is excluded from the heavily indebted poor countries (HIPC) initiative.
Japan was Vietnam’s largest creditor, making up 17 percent of the country’s debt total, followed by the World Bank with 13 percent, and the Asian Development Bank with 8 percent.
Government bond holders account for 28 percent of the country’s debt total.
The government aims to keep Vietnam’s public debt at less than 65 percent of the country’s GDP by 2015. Both the government debt and foreign debt will be less than 50 percent of the GDP.
The government plans to issue additional bonds to mobilize US$225 billion for transportation, irrigation, healthcare and education projects until 2015.
The government will amend regulations on ODA management and utilization and finalize policies on the public-private partnership (PPP), build-transfer-operate (BTO), build-operate-transfer (BOT), and build-transfer (BT) models to diversify the mobilization of capital resources.