return icon Vietnamnet.vn

Vietnam's public debt payment at safe levels after pandemic

The ratio of public debt to GDP is not too high, but the pressure of debt repayment in both VND and foreign currencies will increase in 2020-2021.

According to the Ministry of Finance (MOF), at the end of 2019, the public debt was below 55 percent of GDP, lower than the peak of 63.7 percent of GDP in 2016. Of this, the government’s debt was equal to 48 percent of GDP, also lower than that of 2016.

 

{keywords}

 



Analysts can see positive aspects in the debt structure. The proportion of domestic debts has increased, accounting for 62.3 percent of the government debt (it was 60.1 percent in 2016), while foreign debt decreased to 37.7 percent (it was 39.9 percent in 2016).

This restricts demand for foreign currencies to pay debts, especially when Vietnam has been relying on imports/exports and FIEs.

IMF said Vietnam’s public debts are not too high if compared with other ASEAN countries.

However, there is a matter of concern – the debts that will mature in 2020-2021. MOF estimates that the government would have to pay VND349 trillion in 2020, including VND287.900 trillion worth of domestic debts and VND61.1 trillion worth of foreign debts.

There are still no detailed figures about 2021, but a government report showed that the principal alone that the government has to pay is VND211 trillion, or 41 percent higher than 2020.

There are still no detailed figures about 2021, but a government report showed that the principal alone that the government has to pay is VND211 trillion, or 41 percent higher than 2020.

As for government bonds, the government would have to pay VND166 trillion worth of principal with the payment peak time in October.

The figure is expected to be even higher next year, VND204.800 trillion.

The government bonds issued in the domestic market in foreign currencies worth $1.7 billion will mature in 2020 and 2021. The foreign debts are mostly ODA loans and preferential loans from bilateral and multilateral donors.

The MOF’s report about public debt released in late 2019 showed that the biggest creditors of Vietnam are the World Bank (31.8 percent of the government’s total foreign debts), Japan (29.8 percent) and ADB (17.5 percent).

The government has stopped acting as a guarantor for any enterprise to borrow money for the last year. However, the loans guaranteed by the government in the past will be due in some days. Severely hit by the pandemic, enterprises foresee an inability to pay debts.

In mid-May, the national flag air carrier Vietnam Airlines had to pay $800 million to Vietnamese and foreign commercial banks. The money was used to buy aircraft in 2009-2015 and the loan was guaranteed by the government.

According to Vo Huu Hien from MOF, from July 2020, Vietnam will have to pay principal twice as much as previously. Vietnam’s foreign debts are mostly in SDR, JPY, US and EUR currency.

Kim Chi 

 

VN aviation industry's slowdown to affect public debt

VN aviation industry's slowdown to affect public debt

The debts incurred by enterprises in the aviation industry, due in 2020, if not payable, will have a big impact on public debt.

Restructuring, bad debts prevent VN banks from paying dividends

Restructuring, bad debts prevent VN banks from paying dividends

At Sacombank’s annual general meeting held on June 5 its permanent vice chairman Pham Van Phong said that in 2019 the bank’s pre-tax profit increased by 43.2 per cent to VND3.2 trillion (US$137.5 million), which was 21.4 per cent above the target.

MORE NEWS

Two new Viettel inventions granted exclusive protection certificate in the US

Viettel Aerospace Institute (VTX), a member of Viettel Group, was officially granted an exclusive protection certificate by the US Patent and Trademark Office (USPTO) for two works in the field of optoelectronics and materials industry.

SEA Games 31 fuels recovery of local tourism industry

The hosting of the recent 31st Southeast Asian Games (SEA Games 31) between May 12 and May 23 can be viewed as a golden chance for the local tourism industry to recover after months of little activity due to the impact of the COVID-19 pandemic.

HCM City Mayor shows concerns as doctors turn from ‘heroes’ to ‘violators’

With great efforts in the fight against Covid-19, medical workers have been honored as heroes.

Stopping the licensing of new airlines, restricting the expansion of fleets

Controlling the number of new airlines until the market recovers and restricting licensing to expand fleets in the immediate time are solutions proposed by the State Capital Management Commission (SCMC).

Luxury-tax hike should be postponed until after 2024

Discussing the luxury tax law, experts said it is necessary to design a reasonable taxation roadmap and begin raising the tax only after 2024.

Huge haul in new markets for Vietnam’s tra fish exports

Demand for Vietnam’s tra fish (pangasius) is up in major markets, driving the export of the catfish overseas, reports the Vietnam Association of Seafood Exporters and Producers (VASEP).

Facebook collects money from partners to pay tax in Vietnam

The amount of money Facebook is planning to collect from Vietnamese partners accounts for 5 percent of invoice value. The money will be used to fulfill tax obligations.

Vinh Phuc: Wall collapse kills three people

Three people were killed and another seriously injured in the northern province of Vinh Phuc after a wall of a house collapsed and buried them.

JPMorgan Chase announces fresh capital injection into VN

JP Morgan Chase on Thursday announced a capital injection of US$123 million into its branch entity in HCM City, bringing the firm’s total capital investment into Viet Nam from $77 million to $200 million, or VND4.6 trillion.

Vietnam ready to facilitate long-term business and production of foreign firms

The nation continues to pay close attention to and attaches great importance to improving the investment environment and creating favourable conditions in which foreign enterprises can conduct long-term production business in the country.

Family of four found dead in Hanoi in apparent murder-suicide

Four members of the same family were found dead in an apartment complex in Hanoi's Hoang Mai District.

HCM City presents first floating fruit festival with trimmings

The first floating fruit festival organised by HCM City next week will present specialty fruits from the southern region in a cultural milieu including folk music and dance.

Incumbent, former officials of Da Nang, Quang Binh disciplined

Party General Secretary Nguyen Phu Trong on May 26 chaired a meeting of the Party Central Committee’s Secretariat to consider disciplinary measures on an official of Da Nang city and a former official of Quang Binh province.

Vietnam facilitates lychee purchase by Chinese traders in Bac Giang: Spokeswoman

Competent agencies and localities of Vietnam always create favourable conditions for Chinese businesses and traders to buy the fruit in Bac Giang, Foreign Ministry spokeswoman Le Thi Thu Hang said.

Hanoi to build ten more bridges over Red River

Hanoi will build ten more bridges across the Red River by 2030 and a vision until 2050.
back_to_top