Vietnam's public debt may quickly exceed the ceiling set at 65% of GDP, which will result in the national economy's budget risks, warned a World Bank economist.
The WB’s lead economist in Vietnam, Sandeep Mahaja, said that Vietnam has seen a rapid rise in its public debts from 59.5% in 2014 to 62.5% in 2015; and predicted increases to 63.8% in 2016; 64.4% in 2017 and 64.7% in 2018.
The World Bank's lead economist in Vietnam, Sandeep Mahaja,
According to a recent report from the Ministry of Finance, Vietnam's public debt is estimated at USD115.7 billion. So, with the total population of 91.7 million, each Vietnamese person now has to bear a public debt of USD28.4 million, the record figure to date.
Mahaja said, "Currently Vietnam's public debt is still at safe level and we are not worried about Vietnam's payment ability so far, however, the payment terms are a problem for Vietnam, because they are almost all short. This has put a pressure for Vietnam's public debt repayments, particularly in the context of the country's high budget deficit at present."
He noted that spending up to 16% of the country's budget every year to pay the public debt is a big risk for the national economy, affecting investment for development in various areas such as education and health. So the Vietnamese government needs to have a stable frequent spending plan.