Dr. Le Dang Doanh, a renowned economist, has said the ministry has “looked at the situation more realistically”.

He noted that the latest figure was closer to experts’ calculations and the figure of the World Bank’s (WB).

“The figure shows Vietnam’s public debt has been increasing rapidly and the public debt burden is serious,” Doanh said.

He said that the public debt as increased since the devaluation of the dong.

“The dong has lost 5 percent of its value against the dollar. This means that Vietnam will have to pay 5 percent more in dong to pay debt,” he explained.

According to MPI, the state budget revenue is not big enough to pay principal, which has forced the government to borrow money to pay debts. 

In 2014, the government had to borrow VND80 trillion, while the figure is VND130 trillion in 2015.

MPI also pointed out that Vietnam’s ratio of public debt on GDP is higher than the average ratio in other regional countries.

“Vietnam’s low income per capita, the aging population and low productivity all put pressure on the public debt,” it said. 

Doubts

Bui Duc Thu, deputy chair of the National Assembly’s Finance & Budget Committee, said he has no information about the calculation method that MPI applied to produce such a figure.

“Under the current laws, the Ministry of Finance has the responsibility of publicizing the public debt, while the State Audit takes the responsibility of checking the figure,” he said.

“The agencies which show inaccurate figures will be responsible for their calculation,” he added.

In reports to the National Assembly recently, the government repeatedly affirmed that the public debt was still ‘safe’.

However, Doanh said ‘one should be think that the public debt is still safe’.

“The National Assembly and the government need to discuss the public debt problems soon and reduce government spending to cut the regular expenses of the state,” he said. “The situation will be very serious if the state does not practice thrift.”

The Asian Development Bank (ADB) has also given warnings about Vietnam’s public debt. 

It predicted that the debt would be 62 percent of GDP by the end of 2015. Meanwhile, foreign debt, mostly long-term preferential loans, has remained at 28 percent of GDP for the last three years.

Dat Viet