Vietnam’s public debt on the wane

According to a Ministry of Finance bulletin, Vietnam’s public debt has gradually decreased over the past five years, from 61.4% in 2017 to 43.1% of GDP last year. Against a GDP of $368 billion in 2021, Vietnam’s public debt last year was $157 billion.

In addition to public debt, statistics compiled by the finance ministry for 5 years (2017 – 2021) show that government debt, government-guaranteed debt and local government debt were also decreasing.

Government debt dropped from 51.7% of GDP in 2017 to 39.1% in 2021, equivalent to nearly $144 billion. Government-guaranteed debt decreased from 9.1% in 2017 to 3.8% in 2021, or nearly $14 billion.

The country’s foreign debt remained at 38.4% by the end of 2021, compared to 49% in 2017.

While foreign debt decreased, domestic debt increased significantly, accounting for 67.2% of the government’s outstanding debt, or $95 billion at the end of 2021.

The country’s foreign debt obligation increased slightly, by 6.8% of total export last year.

According to the bulletin, Japan, South Korea, France, Germany are Vietnam’s largest bilateral creditors. As of 2021, Japan had lent $15.3 billion; South Korea ($1.36 billion) and France ($1.28 billion).

Topping the list of multilateral partners lending to Vietnam were the World Bank (WB), with $16.2 billion; and the Asian Development Bank (ADB) with $8.032 billion.

This year, the government is expected to borrow a maximum of $30 billion, of which 96% are loans to balance the central budget.

If the GDP in 2022 grows as expected, the government calculates that public debt will be about: 43-44% of GDP.