Vietnam’s government debt jumps 80 pct in four years
|An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by Reuters/Kham|
Over 42 percent of the $93.4 billion debt was owed to foreign lenders in 2015.
Vietnam's government debt rose a staggering 80 percent beteen 2011 and 2015 to $93.4 billion, according to the latest figures released this week.
More than 42 percent of the money was owed to foreign lenders, the finance ministry said in a report.
The government debt in 2015 was more than twice the country's budget income, the report said.
Debts owed by cities and provincial governments increased three times to $3.3 billion over the same period.
Finance Minister Dinh Tien Dung said at a meeting in March that Vietnam’s public debt and government debt are rising rapidly due to "weak management and use of loans”.
Dung said Vietnam took out several expensive loans between 2011 and 2013 with annual interest rates of as high as 13 percent a year.
Meanwhile, economic growth targets are not being met, he said.
Vietnam recorded its highest GDP growth in five years at 6.7 percent in 2015, thanks largely to crude oil exploitation.
But oil failed to work its magic in 2016 amid global price drops. The economy expanded an estimated 6.21 percent last year, its first slowdown in four years, with the mining sector falling 4 percent on low coal and crude oil prices.
This year, Vietnam has set a growth target of 6.7 percent, but both government officials and business insiders have said the plan is too ambitious.
Growth in the first quarter hit a three-year low of 5.2 percent, partly due to a slump in electronics exports. The rate picked up to 6.2 percent in the second quarter.
HSBC lowered its growth forecast for Vietnam from 6.4 percent to 6 percent in July.