Gov’t Discusses Public Debts, Non-performing Loans
Public debt and non-performing loans were among the major topics of the Government’s one-day meeting on October 29.
Regarding public debt, Minister of Finance Dinh Tien Dung affirmed that it is still well within safety limits despite rising trend over the past time due to more loans acquired for national development and debt payment.
The country’s foreign debt accounts for around 49 percent and the majority of which is official development assistance, he said.
It is estimated that national debt will reach 64.9 percent of the gross domestic product in 2016 compared to the red line of 65 percent set by the National Assembly and the figure is expected to gradually drop afterwards, to 60.2 percent by 2020.
Up to 98 percent of public debt is spent on development projects, which is entirely in line with the national public debt strategy.
Speaking at the meeting, PM Nguyen Tan Dung stressed rising public debt has put more pressures on solvency, thus he will adopt an instruction to effectively control it.
To pay off debt, the Government will set aside just under 25 percent of the total spending budget while restructuring debt portfolio to ensure debt repayments do not exceed 25 percent of GDP.
Meanwhile, Governor of State Bank of Vietnam Nguyen Van Binh revealed that the settlement of non-performing loans have reaped positive outcomes.
Credit organizations’ bad debt will be brought down to 3 percent by the end of 2015 from the current 5.43 percent, the Government pledged.
The Cabinet said it will also amend relevant legal documents to enhance the efficiency of the Vietnam Asset Management Company (VAMC) in handling bad debts. The Company was said to buy VND 125 trillion worth of NPLs in the first nine months.
Report showed that the bad debt ratio of the banking system sharply fell from 17 percent in 2012 to 5.43 percent in October this year.
VGP
Vietnamese
