Vietnam public debt predicted to fall to 61.4pct of GDP in 2018

26-Sep-2018 Intellasia | Hanoi Times | 6:00 AM Print This Post

The number is based on the assumption that the average economic growth rate of 2018 would be 6.7 percent.

Vietnam’s public debt by the end of 2018 is expected to reach VND3,130 trillion (US$133.93 billion) or 61.4 percent of GDP, down 2.3 percentage points from 2017, VnExpress reported.

According to estimates by the Ministry of Planning and Investment (MPI), the country’s public debt as per GDP would decline by 2.5 percentage points in 2018 compared to its previous prediction released on August, stated Tran Quoc Phuong, head of the MPI’s Department for National Economic Issues, in a teleconference meeting on September 24.

The review number is based on the assumption that the average economic growth rate of 2018 would be 6.7 percent instead of the previous estimate of 6.53 percent, Phuong added.

Vietnam’s budget revenue collection this year is expected to reach VND1,350 trillion (US$57.76 billion), up 3 percent compared to the year’s estimate and 5.5 percent year-on-year, while the country’s overspending is set to reach 3.67 percent of GDP.

Additionally, total social investment is forecast to stand at VND1,890 trillion (US$80.88 billion), up 13.3 percent year-on-year and equal to 34 percent of GDP. The country’s actual FDI would reach $18 billion by the end of 2018, up 2.8 percent year-on-year.

In the MPI’s previous projections, Vietnam’s public debt to GDP ratio would reach its peak in 2018 of 63.92 percent, then decline slightly to 63.46 percent in 2019 and 62.58 percent in 2020, which are all below the limit of 65 percent of GDP set by the National Assembly.

However, the public debt is on growing trend in terms of scale, increasing VND360380 trillion (US$15.5316.39 billion) on average per year.

Specifically, Vietnam’s public debt is expected to reach VND3,900 trillion (US$168.31 billion) and VND4,300 trillion (US$185.57 billion) in 2019 and 2020, respectively, equivalent to respective nominal GDP of VND6,150 trillion (US$265.36 billion) and VND6,850 trillion (US$295.56 billion), according to the ministry’s report.

According to the MPI, fiscal deficits in the next three years would be 3.71 percent, 3.59 percent and 3.4 percent of GDP.

In a recent update on Vietnam, HSBC forecast the country’s public debt-to-GDP ratio to rise moderately to 61.6 percent this year before going down to 61.4 percent in 2019, assuming a fiscal deficit of 4 percent of GDP for both years, which is above the government’s target deficit of 3.7 percent for this year.

However, if the government is able to meet its target deficit of 3.7 percent for the year, the report estimated that the public debt-to-GDP ratio could be as low as 61.2 percent by the end of the year.


Category: Economy, Vietnam

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