Prime Minister Nguyen Tan Dung said yesterday that public debt remained below the safety limit of 65 per cent of gross domestic product (GDP), and predicted it would sink to 60.2 per cent by 2020.
|Work on the Cat Linh-Ha Dong urban railway project, funded by China's Official Development Assistance, is underway. Up to 98 per cent of public debt was reportedly spent on development projects, in line with the national public debt strategy. — VNA/VNS Photo Tran Viet|
Up to 98 per cent of public debt was spent on development projects, which was in line with the national public debt strategy, the PM told cabinet members at their monthly meeting in Ha Noi.
To pay off debt, the Government will set aside just under 25 per cent of the total spending budget. By 2020, 19.5 per cent of the budget will be spent this way.
The Government will also restructure its debt portfolio to ensure debt repayments do not exceed 25 per cent of GDP.
Regarding the settlement of non-performing loans, the leader asked the State Bank of Viet Nam (SBV) to lower the proportion of such loans to three per cent next year, down from 5.43 per cent recorded in mid-September.
He said that the Government would alter the relevant legal documents, making it easier for the Viet Nam Asset Management Company (VAMC) to clean up bad debt.
By late September, VAMC acquired VND125 trillion (US$5.9 billion) worth of bad debt, moving closer to its target of VND130-150 trillion ($6.1-7.1 billion) for this year. It also resold VND4 trillion ($190.4 million) of debt to the public.
According to SBV Governor Nguyen Van Binh, credit growth since late 2013 expanded by 6.62 per cent in production and trade by September 22. This had expanded to 7.46 per cent by October 20.
The PM predicted that the economy would grow by more than 5.8 per cent this year, driven by mechanical engineering, mining, agriculture and services.
He requested ministries, agencies and localities to fine tune market regulations, with a focus on administrative reforms, improving the business climate and boosting national competitiveness.
More crackdowns on counterfeit, smuggled and low quality goods were also required, especially poultry from China, he said.
He called for equitisation of State-owned enterprises and the restructuring of the agricultural sector to be sped up.
A report delivered by the Ministry of Planning and Investment earlier yesterday showed that the economy continued to recover in all major sectors.
Indeed, the Government's monthly meeting in Ha Noi was told that the growth rate was higher than for the same period in the two previous years.
Industrial and agricultural production generated a trade surplus thanks to a growth in exports, while the tourism sector benefited from an influx in international visitors.
The report also noted that inflation had been curbed. The meeting was told that the nation recorded the lowest increase in the consumer price index (CPI) in 11 years, it had a stable interest rate and foreign exchange market, and there were positive changes in foreign direct investment (FDI) and the disbursement of official development assistance (ODA), and preferential loans.
Social security continued to be ensured, political security and social order were maintained, and there had even been positive developments in traffic safety.
The report outlined a number of economic challenges, including difficulties in production and business operations, a high number of suspended businesses, low credit growth.
Prime Minister Nguyen Tan Dung asked Cabinet members to focus on clarifying emerging issues on public debt and bad debt, the structure of budget collection and spending, and measures to remove obstacles hindering enterprises.
Cabinet members also debated draft decrees on support policies for ethnic minorities and public career services, a draft resolution on tourism, and a report on the local administration model project.