Public debt down 1.9 pct

(VOV) - 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 State budget spending, as well as the National Assembly’s allocations of annual budget revenue to incur the government’s expenses.

The report, which was recently presented to the ongoing National Assembly session, says foreign loans play a crucial role in national development investment, making a significant contribution to stabilising the macro economy, improving Vietnam’s position globally, and realising the national modernisation and modernisation plan.

Japan was Vietnam’s largest creditor, making up 17 percent of the country’s debt total. It was followed by the World Bank with 13 percent, and the Asian Development Bank with 8 percent.

Government bonds 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, of which both the government’s debt and foreign debt will be less than 50 percent of the GDP.

The government plans to issue additional bonds to mobilise US$225 billion for transportation, irrigation, healthcare and education projects till 2015.

To effectively use and control public debt, it will publicize information on the mobilisation, allocation, use and payment of national public and foreign debts.  

The government will amend regulations on ODA management and utilization and finalise policies on the public-private partnership (PPP), build-transfer-operate (BTO), build-operate-transfer (BOT), and build-transfer (BT) models to diversify the mobilisation of capital sources.

Vietnam is among countries that have public debt under control and is excluded from the heavily indebted poor countries (HIPC) initiative.