An insight on public debt

After the announcement  about the public debt situation in Vietnam had been released by Government at Congress, members of the National Assembly and many people throughout the country expressed sympathy before the solutions that the Government had put in place to manage tighter public debt and implement the commitment to repay. But besides that, there are still people with partial sight of the public debt, distorting the facts, inferences about public debt in Vietnam and post on social networks, causing public panic.
In the reports on the opening day of the 8th Session of the National Assembly XIII, Prime Minister Nguyen Tan Dung said: In 2014, we have basically achieved the goals and tasks of socio - economic development which Congress set. Regarding macroeconomy, the report affirmed: “Inflation is under control, macroeconomic stability is better. Consumer price growth fell sharply, in 9 months increased by 2.25%, the lowest figure in 10 years and it is expected increase of less than 5% whole year. Interest rates decreased by 2% in comparison to the end of 2013. Credit growth to the end of September reached 7.26% (same period is 6.87%) and it is expected to increase 12-14% yearly schedule. Rates and foreign exchange market are stable; foreign currency reserves increase, reaching the highest level ever. Confidence in Vietnam dong is increased. Government’s report also bluntly stated limitations and weaknesses: “Macroeconomy and the balance of the economy are not strong. Budget deficit remains high. Public debt is increasing rapidly. Direct debt ratio of government revenue to total is about 14.2% in 2014 (according to the provisions of the Public Debt Strategy is less than 25%), but but if adding up both lend for existing loans and new landing for lend is about 26.2%”.
This is not the first time the government announced public debt issues before Congress, people, but from many previous meetings, the public debt figures were shown to the highest power body of the state.
Explaining the high increase in puplic debt, in an appendix of the Government’s report analyzed reasons that the state budget met with difficulties but but it still must be reduced revenue to support the business, Government budget and debenture bonds were used to focus on investment for development and construction of infrastructure. At the same time, there must be devoted to the implementation of social policies and wages. On the other hand, the structure of foreign preferential loans tend to decrease over the years because Vietnam has entered the group of middle income countries, the proportion of domestic borrowing increased and the mobilization of government bonds mainly under 5 years resulted in direct debt obligations of the Government in the short-term increase. In this context, we still ensure full repayment, not to generate delinquency.
Thus, the explanation of the Government on public debt was clear, public debt indicators remain at a safe level. However, on some social networks, some people have the wrong information about public debt and “judged” that: “Public debt crisis in Vietnam is in the offing”, “Vietnam’s public dept is going to bankrupt”, “Vietnam's economy is coming to an end”, “Public Debt in Vietnam can not afford”... This information is provided for the purpose of alarming the public, making people doubt the leaders of the Party, the executive management of the Government.

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All comments [ 10 ]

Huy Quốc 12/11/14 21:03

Vietnam closely follows the set targets, including a GDP growth of around 6.5 per cent, inflation below 10 per cent, a trade deficit of less than 13 per cent, a reduction in the poverty rate by 2 per cent and job generation for more than 1.6 million workers.

Vân Nhàn 12/11/14 21:05

Ministries and localities should implement solutions together, particularly in monetary and financial regulations, investment in agriculture and economic restructuring.

Lê Tín 12/11/14 21:07

The resolution has controlled the gold and foreign currency market and reduced monthly inflation rate to below 1 per cent.

Quốc Kiên 12/11/14 21:09

Epidemics and disasters have caused loss of life and property as well as hindrances to agricultural production, and that pushed up input prices in agricultural production, in addition to high interest rates and difficulties in credit access.

Phạm Hiếu 12/11/14 21:10

We should focus on restructuring public investment towards sustainable development.

Huy Lâm 12/11/14 21:12

We also must reach consensus on prioritising macroeconomic stability to ensure sustainable economic development; increasing national economic competitiveness; maintaining socio-political stability; democracy and discipline in society.

Quốc Cường 12/11/14 21:13

All aims at laying a foundation for the country to become a modernity-oriented industrialised nation by 2020.

Hùng Quân 12/11/14 21:14

The Government soon stabilise the organisation, especially the assignment of functions and tasks of each ministry for smooth, effective and transparent operations.

Hoàng Lân 12/11/14 21:16

Ministries, branches and localities to speed up administrative reform, fight corruption, and minimise the mechanism of “giving” and “asking”, especially in budget allocation and major construction investment.

Quân Hoàng 12/11/14 21:18

The Government should pay more attention to agriculture, particularly the effective implementation of a national target programme on new rural development.

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