Public debt ceiling to remain at 65%

The government will not lift the public debt ceiling but will tighten its financial discipline to develop enterprises and further attract social investment to create the resources needed for reform and socioeconomic development. Lifting the ceiling would affect the country’s loan repayment capacity, Deputy Prime Minister Vuong Dinh Hue told the National Assembly’s second session on October 20. To maintain safety, “Vietnam has to control public debt to no more than 65 per cent of GDP, government debt to no more than 55 per cent, and national foreign debt to no more than 55 per cent, to 2020,” he said at the team discussion on economic development. Many proposals in regard to raising the public debt ceiling have been forwarded to the government to open up space for investment and development. Deputy PM Hue insisted, though, that the ability to repay debts is much more important than setting a ceiling. Following international practice in limiting debt repayment obligations over national budget collections at 25 per cent is facing a host of difficulties. In 2015 the rate was 27.5 per cent, including debt repayment and borrowings to roll over debts.

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