Illustrative image (Photo: VNA)Hanoi(VNA) – Vietnam is targeting keeping public debt, comprising central governmentdebt, government-backed loans, and local government debt, below 65 percent ofGDP between 2016 and 2018.
The objective was set at a medium-term debtmanagement programme for 2016-2018 recently approved by Prime Minister NguyenXuan Phuc.
The programme is meant to keep loans atacceptable expenses and risk level to ensure state budget balance andsocio-economic development. It aims to keep the allocation and use of loans inline with their original purposes, debt indexes at safe levels, and ensure debtrepayment capacity.
It sets the ceiling for the central government’soutstanding debt at 54 percent of GDP and for the country’s foreign debt at 50percent of GDP.
Domestic and foreign loans taken to make up forstate budget overspending, which made up 5.4 percent of GDP in 2016, are hopedto decrease.
The programme stipulates about 606.4 trillionVND (26.69 billion USD) will be sourced from the central government’s loans tomake up for state budget overspending from 2016 to 2018. That includes about247.2 trillion VND (10.88 billion USD) in 2016, 172.3 trillion VND (7.59billion USD) in 2017, and 186.9 trillion VND (8.22 billion USD) in 2018.
Central budget overspending is targeted at 3.38percent of GDP in 2017 and 3.3 percent of GDP in 2018.
Under the newly approved plan, the centralgovernment won’t provide guarantees for new domestic and external loans. Thelist of programmes and projects set to receive Government guarantees will bereviewed to calculate the concrete Government guarantee level.
Meanwhile, the cap on local budget overspendingis set at about 6 trillion VND (264 million USD) in 2017 and 11.1 trillion VND(488.51 million USD) in 2018, in accordance to the Law on State Budget 2015.-VNA
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