HANOI, Nov 2: Vietnam’s public debt, and foreign debt in particular, are expected to rise this year and in the near future along with growing demand for funding infrastructure projects, the government said on Friday.
‘Due to the increasing demand for investment in programmes, projects for building socio-economic infrastructure, the rising trend of public debt, government debt in 2012 and in the following years will continue,’ the government said in a statement.
Public debt in 2012 is estimated at 1,632 trillion dong, the statement cited a government report to the National Assembly as saying, confirming earlier media reports.
It did not give details on the country’s foreign debt.
The government is projected to keep the country’s foreign debt not above 50 percent of GDP by 2015, while the public debt would not exceed 65 percent of GDP, the statement said.
Earlier the official Tuoi Tre (Youth) newspaper quoted the government report as saying foreign debt could edge up to an estimated 1,289.5 trillion dong ($61.9 billion) at the end of 2012, or 43.77 percent of the country’s gross domestic product.
Last year Vietnam’s foreign debt stood at $50 billion, or 41.1 percent of the GDP, the Finance Ministry has said, having revised the ratio down slightly from a previous government figure of 41.5 percent.
‘The cost of borrowing shows a rising trend, especially due to the conversion of lending conditions applied to Vietnam as the country becomes a middle-income nation,’ the government said.
‘In the time ahead, the government will not consider issuing guarantee for issuing international bonds,’ the statement said. Banks and companies seeking to tap foreign funds via bonds will not have government guarantee, it added. ($1=20,830 dong) (agencies)
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