Lan Nhi
Prime Minister Nguyen Tan Dung at the NA's Q&A session on November 19 - PHOTO: TTXVN
“Public debt has skirted the permissible threshold (65% of GDP) and the repayment pressure in the short term is huge,” stressed PM Dung, who pointed the accusing finger at low investment efficiency and corruption. Without tight control, the national financial balance will be at risk, Dung told the Q&A session.
Worrying situation
High public debt is the focal question that many NA deputies sent to the Prime Minister.
The Government leader briefed the law-making body of the worrying situation, saying the economic downturn had caused the budget revenue to shrink while the Government still had to increase expenditure. As such, spending for development investment has also tumbled to around 18% of GDP compared to 25% as targeted.
The amount of public debt rose staggeringly as official development assistance (ODA) disbursements had increased lately alongside the rising amount of loans underwritten by the Government.
To ensure budgetary balance, the Government has also boosted domestic borrowing via Government bonds. The amount from such bonds increased from VND250 trillion in the 2006-2010 period to VND335 trillion in 2011-2015.
As foreign loans have become less concessionary lately and domestic loans generally have short terms, the pressure to repay debts in the near term has intensified, the Prime Minister said.
The share of the State budget used by the Government to repay debts is 14.2%, Dung said.
The Government has to take out more long-term loans to repay old debts to deflate the pressure. Specifically, the Government issued bonds worth VND144 trillion in 2012 at an annual coupon of 9.8%, some VND182 trillion in 2013 at a coupon of 7.79%, and over VND330 trillion at a coupon of 6.62% this year.
Over VND117 trillion out of this total sum has been used to pay old debts, Dung said.
Earlier this month, the Government issued US$1 billion of ten-year bonds on the international market with an annual coupon of 4.8%, and the proceeds are used to pay debt issued in 2015 and 2010 so as to reduce the interest payment.
Close supervision
In order to ensure that public debt will not threaten the national financial safety, PM Dung said stringent supervision will be exercised. The target is to harness and reduce public debt to some 60.2% of GDP by 2020.
The Government will also tightly control debts arising from capital construction projects, debts owed to the Social Security Fund, and debts owed by State-owned enterprises.
In the future, public debt will only be used for State investment. Debt papers, according to Dung, must have a term of at least five years to avoid heavy obligations in the short term.
Đăng ký: VietNam News
