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Roundup: Vietnamese parliament raises gov't debt ceiling

Xinhua, November 9, 2016 Adjust font size:

Vietnamese lawmakers on Wednesday agreed to raise the government debt ceiling for the 2016-2020 period.

The move was taken in a resolution on the national five-year financial plan during 2016-2020 period adopted at the ongoing second session of Vietnam's 14th National Assembly (NA) held in Vietnam's capital Hanoi.

The resolution stated that in the next five years, the government debt will be kept not to exceed 54 percent of the gross domestic product (GDP), compared to the limit of 50 percent of the GDP during 2011-2015 period.

According to the NA Standing Committee, before adopting the resolution, many lawmakers argued that during 2016-2020 period, the government debt should be targeted below 53 percent.

Addressing the issue, the NA Standing Committee said the cap of government debt at 53 percent of the GDP for the whole five-year period will be hard to realize, as the rate for the previous five-year period of 2011-2015 was 50.3 percent, higher than the set limit of 50 percent of the GDP and the figure may reach 53.2 percent in 2016 alone.

As a result, the government debt should be curbed at less than 54 percent of the GDP for the five years to come, local VNEconomy online newspaper quoted the NA Standing Committee as saying.

In mid-October, the Vietnamese government proposed to raise the government debt ceiling to 55 percent, from the current 50 percent for the whole 2016-2020 period.

The resolution also requested in the next five years Vietnam's annual national repayment obligation to stay at less than 25 percent of the country's total export revenue. Meanwhile, the government's direct repayment obligation, excluding on-lending debt, should be less than 25 percent of the state budget revenue each year.

During 2016-2020 period, Vietnam is set to collect 6,864 trillion Vietnamese dong (307.8 billion U.S. dollars) to the state budget, up 1.65 times as much as that in 2011-2015 period.

The country's state budget spending is targeted to reach around 8,025 trillion Vietnamese dong (359.86 billion U.S. dollars) during the period, with more to be spent on investment for development and less on recurrent expenditure, said the resolution.

At the same time, the rate of state budget deficit in the next five years should not surpass 3.9 percent of the GDP. Earlier at the opening ceremony of the second session, Vietnamese Prime Minister Nguyen Xuan Phuc said in 2017 alone, Vietnam's state budget deficit is targeted at less than 3.5 percent of the GDP. Endit