Financial University under the Government of the Russian Federation

Government debt in
Vietnam
Moscow, 2020

Tran Thanh Van

Nguyen Thi Thanh Thao
Tran Thi Mai Anh
 Highlights

1. Definition
2. Legal framework
3. The current situation of economy
and government debt in Vietnam
4. Structure of the government
debt.
5. Reasons.
6. Challenges and solutions.
 • Government debt is the total value of money
borrowed by governments to finance budget
Definition of deficits.

Government • Government debt can mean the combined debt of

different layers of government (national, municipal
Debt in and other levels)
• It is divided into 2 types: Domestic debt and
Vietnam External debt.
• Governments create debt by issuing government
bonds and bills to borrow from organizations.
• Governments can also borrow money directly from
commercial banks, international financial
institutions.
 • Law on Public Debt Management (enacted
2010, January)
Legal • Scope of Public Debts:
framework - Government Debts
- Government Guaranteed Debts
- Local Government Debts. (not including
SOEs’ debts without government guarantee)
The current situation of government debt
Government debt to GDP (%)
Current status of Vietnam public debt
Vietnam GDP growth rate(%)
Vietnamese structure of output as % of GDP
Vietnamese FDI net inflows (million US$) and FDI inflows (as % of
GDP)
Vietnam Total External Debt
Vietnam Total Domestic Debt to GDP
 Trend

Source: Ministry of Finance& The State Bank of Vietnam

External debt
structure
 Outstanding Marketable Debt, by Type of Treasury Security

Domestic
debt
structure
Vietnam:
Public Sector
Debt
Sustainabilit
y Analysis
(DSA)—
Baseline
Scenario
(In percent
of GDP)
Vietnam: External Debt Sustainability Framework, 2014–2024
(In percent of GDP)
Causes of Vietnam's public debt increasing
trend
• The pressure to mobilize capital for investment in socio-economic
development is great in the context of slowing Vietnam's economic
growth.
• The long-term increase in state budget deficit makes debt a resource
to compensate for the budget deficit.
• Public investment is high, investment efficiency is low in the context
of Vietnam's saving situation.
• The mobilization, allocation and use of loans in Vietnam are still
spread.
 • Regulatory has not been strictly
Challenges handled;
• Impact of the Covid-19
pandemic;
• Government debt numbers do
not reflect the actual
government debt of the country;
Solutions

• Continue to strengthen government debt management in the coming

years;
• Improve efficiency in using government debt;
• Maintain economic growth;
• Control interest rate and exchange rate risks;
• Adjusting budget decentralization;
Thank you for
your attention!