Vietnam’s foreign debt is stable
06/08/2010 - 235 Lượt xem
This was announced by the International Monetary Fund (IMF), the World Bank (WB), and international rating agencies such as Moody's, and Standard and Poor.
After more than 10 years of restructuring and repayment, Vietnam’s foreign debts now amount to 34 percent of GDP. At the end of 2005, the Ministry of Finance (MOF) said that Vietnam’s total foreign debts amounted to 16.8 billion USD.
The increasing commitments from Official Development Assistant (ODA) loans every fiscal year have showed the confidence of the international financial community in Vietnam’s effective utilization of foreign loans and debt management. In addition, at the Consult Group conference in December, 2005, international organizations pledged to provide Vietnam with more than 3.7 billion USD, an increase of 10 percent compared with the previous year’s commitment.
The confidence of the international financial community in Vietnam’s borrowing and repayment capacity also showed in their purchase of 750 million USD of the bonds Vietnam issued last November, said an official from the MOF.
Source: www.cpv.org.vn, 14/3/2006
In the 2006-2010 period, the financial sector will continue to increase national foreign currency reserves, maintaining it at a reasonable level, ensuring the repayment capacity of foreign loans and restructuring prior debts, applying means such as buying, selling and exchanging debt in order to reduce national loan repayments.
The MOF also said that total national foreign debts (including public and private debts) will reach about 24-25 billion USD by 2010, because Vietnam will borrow a further 14-15 billion USD. The total investment of the 2006-2010 period is estimated to be approximately 36 to 40 percent of GDP, which is 1.5% higher than the 2001-2005 period.
Predictably, 35 percent of investment capital will come from the outside including loans. Therefore, in the medium-term debt management programmes, the MOF will pay special attention to maximum attraction and the effective utilization of external debts to serve national economic and social development.
According to the ministry, borrowing should ensure the lowest cost and effective repayment capacity, without allowing the country to fall into serious debt, a situation that would have a negative impact on macroeconomic figures and the international balance of payments.
In order to maintain safe levels, total foreign loans must remain under 50 percent of GDP, of which, the Government’s repayment is not more than 12 percent of State budget revenue. To obtain this target, it is necessary to keep the over-expenditure of the state budget under 3-3.5 percent of GDP. In addition, the country should develop borrowing plans, ensuring reasonable debts and better risk management.
To maintain foreign debts within safe limits and national financial security, Vietnam should boost export and foreign currency revenue for repayment to avoid overdue debts and continue restructuring national and Government foreign debts.
According to the 2006-2010 medium-term debt management programmes, loans will be directed at investment to create revenue and increase accumulation rather than just spending. The Government will not seek commercial loans or loans without high preference and others with high-risk exchange rates to invest in infrastructure projects.
Apart from borrowing, Government agencies should manage risks emerging from domestic and foreign economic changes to minimize the long-term cost of repayment such as risks of exchange rates, interest rates and the repayment capacity of state budget and credit.
After more than 10 years of restructuring and repayment, Vietnam’s foreign debts now amount to 34 percent of GDP. At the end of 2005, the Ministry of Finance (MOF) said that Vietnam’s total foreign debts amounted to 16.8 billion USD.
The increasing commitments from Official Development Assistant (ODA) loans every fiscal year have showed the confidence of the international financial community in Vietnam’s effective utilization of foreign loans and debt management. In addition, at the Consult Group conference in December, 2005, international organizations pledged to provide Vietnam with more than 3.7 billion USD, an increase of 10 percent compared with the previous year’s commitment.
The confidence of the international financial community in Vietnam’s borrowing and repayment capacity also showed in their purchase of 750 million USD of the bonds Vietnam issued last November, said an official from the MOF.
Source: www.cpv.org.vn, 14/3/2006
In the 2006-2010 period, the financial sector will continue to increase national foreign currency reserves, maintaining it at a reasonable level, ensuring the repayment capacity of foreign loans and restructuring prior debts, applying means such as buying, selling and exchanging debt in order to reduce national loan repayments.
The MOF also said that total national foreign debts (including public and private debts) will reach about 24-25 billion USD by 2010, because Vietnam will borrow a further 14-15 billion USD. The total investment of the 2006-2010 period is estimated to be approximately 36 to 40 percent of GDP, which is 1.5% higher than the 2001-2005 period.
Predictably, 35 percent of investment capital will come from the outside including loans. Therefore, in the medium-term debt management programmes, the MOF will pay special attention to maximum attraction and the effective utilization of external debts to serve national economic and social development.
According to the ministry, borrowing should ensure the lowest cost and effective repayment capacity, without allowing the country to fall into serious debt, a situation that would have a negative impact on macroeconomic figures and the international balance of payments.
In order to maintain safe levels, total foreign loans must remain under 50 percent of GDP, of which, the Government’s repayment is not more than 12 percent of State budget revenue. To obtain this target, it is necessary to keep the over-expenditure of the state budget under 3-3.5 percent of GDP. In addition, the country should develop borrowing plans, ensuring reasonable debts and better risk management.
To maintain foreign debts within safe limits and national financial security, Vietnam should boost export and foreign currency revenue for repayment to avoid overdue debts and continue restructuring national and Government foreign debts.
According to the 2006-2010 medium-term debt management programmes, loans will be directed at investment to create revenue and increase accumulation rather than just spending. The Government will not seek commercial loans or loans without high preference and others with high-risk exchange rates to invest in infrastructure projects.
Apart from borrowing, Government agencies should manage risks emerging from domestic and foreign economic changes to minimize the long-term cost of repayment such as risks of exchange rates, interest rates and the repayment capacity of state budget and credit.
