|Deputy Prime Minister Vương Đình Huệ speaks at the meeting. The country’s foreign debts reduced to 46 per cent of its gross domestic product (GDP) by the end of 2018 from 48.9 per cent a year earlier. VNA/VNS Photo|
HÀ NỘI - The Government’s foreign debts have been declining sharply and under the Government’s control, Deputy Prime Minister Vương Đình Huệ said while chairing a meeting with leaders of some ministries, sectors and the National Financial Supervisory Commission in Hà Nội last Friday.
In 2018, the Government set a loan guarantee limit of US$700 million but did not guarantee to borrow any international loans for projects, Huệ said, adding that the Government prioritised domestic loans because they had lower interest rates.
The Ministry of Finance reported that in the 2011-17 period, Việt Nam’s foreign debts increased by 16.7 per cent per year on average.
The country’s foreign debts fell to 46 per cent of its gross domestic product (GDP) by the end of 2018 from 48.9 per cent a year earlier.
Of the sum, the Government’s foreign debts, Government-guaranteed debts and debts borrowed by domestic businesses were 19.3 per cent, 4.4 per cent and 22.3 per cent, respectively.
The ratio of debt repayment to total import and export turnover was about 25 per cent, meeting international regulations and practices.
With these outcomes, Huệ affirmed that the country’s foreign debts are still below the ceiling rate of 50 per cent set by the National Assembly and under the Government’s control.
He noted that up to 48.4 per cent of the country’s foreign debts in 2018 came from loans of businesses and financial and credit institutions, compared to 25.6 per cent in 2011 and 40.4 per cent in 2016.
The rapid increase of foreign debts in the form of self-repayment was mainly seen in the foreign-invested sector which accounted for 76 per cent of the total debts of enterprises, he said.
The Deputy PM asked ministries and related sectors to strengthen management of foreign debts according to legal regulations, including the law on public debt management, and resolutions of the NA and Government on public debts to ensure the capital demand of the economy in general as well as the rights and obligations of enterprises.
He assigned the Ministry of Finance and the State Bank of Việt Nam to coordinate with relevant ministries to improve the law on self-repayment debt management of enterprises and focus on supervising the total debts and debt structure as well as take into account risks for each business, in accordance with international practices.
The Ministry of Planning and Investment was tasked to review and evaluate overall foreign investment, especially large-scale projects, and the impacts of foreign loan conditions on FDI growth and attraction.
According to the Ministry of Finance, in the first six months of 2019, the total corporate bond issuance exceeded VNĐ116 trillion ($4.98 billion), a year-on-year rise of 7.4 per cent. Of which, VNĐ36.7 trillion was issued by commercial banks (making up 36 per cent) and real estate firms VNĐ22.12 trillion (19 per cent). The remainder was issued by stock companies, 3.5 per cent, and other businesses.
As of June, the capitalisation of the corporate bond market was equivalent to10.22 per cent of GDP, surpassing the set target of 7 per cent in 2020. - VNS