Vietnam has made great strides in overall debt settlement by applying prudent external debt management policies, a study jointly funded by the Ministry of Finance (MoF), UNDP and the governments of Australia and Switzerland has shown.
The external debt situation of the Vietnamese government has been significantly improved, the report stated.
Accordingly, Vietnam is out of debt insolvency with the country’s debt rate just over 34 per cent of the national GDP, despite continuous mobilization of billions of dollars from external financial resources in the last 10 years. That number in 1993 was 173 per cent of the GDP.
Figures released by the Ministry of Finance (MoF) put Vietnam’s GDP at around VND900trillion ($58 billion) this year, with government debt standing at around US$20 billion. (34.45 per cent of the GDP)
Such an amount is rather small in comparison to the safe limit at less than 50 per cent stipulated by international financial institutions, said Tran Van Ta, Vice Minister of Finance.
According to ratings by the IMF, World Bank and international rating institutions, Vietnam’s external debt is relatively sustainable and manageable. Analysts agree that the favorable rating has minimized risks to national finance and will help ensure progress toward a target 8 per cent GDP growth in the next five years.
Le Duc Thuy, governor of the State Bank of Vietnam states, total foreign debts of Vietnam are at a low level, amounting to 34 per cent of GDP and 46 per cent of total receipts in current accounts, of which 80 per cent comes from the public sector.
The majority of the debts of the public sector are preferential loans, Thuy added.
So far, reserves in foreign currencies have doubled and are enough to pay foreign debt, and the country is now capable of paying foreign loans to expire within the next 12 months, Thuy stressed.
The Ministry of Finance forecasts that Vietnam’s foreign debts would reach 37.2 per cent of the GDP in 2010. VIR, Vietnam Panorama
Vietnamese
