The Vietnamese government is resolved to keep public debt within 65 percent of nation's gross domestic product until 2017 and cut it down gradually after that, the prime minister said Friday.
In his meeting with Victoria Kwakwa, World Bank Country Director in Vietnam, on Friday, PM Nguyen Tan Dung promised to restructure public debt, reduce overspending, cut down regular expenditure, meet the date of payments and use loans effectively.
A WB report this week said total public debt of Vietnam rose to approximately US$110 billion in 2014, or an estimated 59.6 percent of GDP, from 50 percent in 2011. It warned that debt servicing costs could pose an increasing burden on the budget.
The Ministry of Finance, meanwhile, projects that public debt could peak at about 65 percent of GDP by the end of 2017 before declining as a result of fiscal consolidation.
Dung said that new loans will be spent on building essential infrastructure facilities while great efforts will be made to curb wastefulness and corruption.
Vietnam hoped to gain access to loans of the WB’s International Development Association (IDA), he said.
Kwakwa also spoke highly of Vietnam’s efforts and policies to tighten fiscal spending, control public debt, address bad debt in the banking system, reform state-owned enterprises, and restructure the banking and agricultural sectors.
The WB is willing to provide official development assistance (ODA) and IDA loans for Vietnam, as well as supporting and cooperating with the country in restructuring the agricultural sector, she said.
The WB and Vietnam will sign two IDA deals worth a total of US$2 billion in the fiscal years of 2016 and 2017, according to Kwakwa.