Vietnam’s public debt is predicted to equal 57.1% of the GDP by late 2011, according to a report from the National Assembly Finance and Budget Committee.

Two different opinions of Vietnam’s public debt (Illustrative photo)

The report given at a recent meeting of the on-going 8th session of the 12th National Assembly showed that Vietnam’s budget deficit is likely to be at VND125.1 trillion (USD6.41 billion), equal to 5.5% of the national GDP, by the end of next year.

The Southeast Asian nation’s government debt is projected to account for 45.3% of the GDP and the national debt is forecast to hold 42.8% of the GDP by that time.

The National Assembly\'s Finance and Budget Committee said that the public debt level of 57.1% is still safe, explaining that positive forecasts on Vietnam’s economic growth and budget collection will help the country afford debt payment. Additionally, the majority of the nation’s public debt is in long-term loans.

Earlier, some economists said that the if public debt does not surpass 60% of the GDP, the numbers remain safe.

The committee also emphasised that it is important to enhance investment efficiency to maintain debt index in a safe level.

However, Deputy Dr. Cao Sy Khiem said, “The public debt making up 41%, 42% and 46% of the GDP is acceptable, but the nation should be cautious of 57.1%.”

Khiem noted that the government should stabilise and balance macroeconomic factors such as those related to trade gap and budget expenditure to keep public debt safe.

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