Vietnam’s public debt rises to $1,500 per citizen

The country’s public debt will likely reach 63.92 percent of GDP, or VND3,530 trillion ($151 billion) by the end of this year, says a report submitted to the PM by the Ministry of Planning and Investment.

The report, which focuses on managing and using official development assistance (ODA) in 2018-2020, notes that the parliament has set a debt ceiling of 65 percent of the GDP.

The country’s public debt consists of central government debt, provincial government debt and loans guaranteed by the government.

Central government debt, which accounts for a major part of public debt, is estimated to reach 52.5 percent of the GDP, or VND2,900 trillion ($125 billion), this year, the report says.

The debt forecast is based on the “most likely” scenario of 6.53-percent growth in GDP and inflation under four percent.

According to these figures, each Vietnamese is likely to carry a public debt burden of VND35 million ($1,500) this year. This is an increase of almost VND4 million ($150) from last year’s public debt per capita, which was VND31.3 million ($1,350).

The ministry also forecasts that public debt will slightly drop to 63.46 percent of the GDP next year and 62.58 percent GDP in 2020.

But in monetary terms, public debt will increase in the next two years, by VND360 trillion next year and VND380 trillion in 2019.

Vietnam’s public debt has been increasing in recent years, rising by 6.8 percentage points from 2013-2017.

The main reason for this is overspending, the Ministry of Finance said at a conference in May.

It added that if this trend persists, Vietnam will have to face the risk of low debt sustainability, meaning the country won’t be able to meet its debt obligations without requiring debt relief.