Gov’t discusses public debts, non-performing loans
20:28 | 29/10/2014
VGP  - Public debt and non-performing loans were among the major topics of the Government’s one-day meeting on October 29.

The overview of the Government monthly meeting, October 29, 2014 - Photo: VGP

Regarding public debt, Minister of Finance Dinh Tien Dung affirmed that it is still well within safety limits despite rising trend over the past time due to more loans acquired for national development and debt payment.

The country’s foreign debt accounts for around 49% and the majority of which is official development assistance, he said.

It is estimated that national debt will reach 64.9% of the gross domestic product in 2016 compared to the red line of 65% set by the National Assembly and the figure is expected to gradually drop afterwards, to 60.2% by 2020.

Up to 98% of public debt is spent on development projects, which is entirely in line with the national public debt strategy.

Speaking at the meeting, PM Nguyen Tan Dung stressed rising public debt has put more pressures on solvency, thus he will adopt an instruction to effectively control it.

To pay off debt, the Government will set aside just under 25% of the total spending budget while restructuring debt portfolio to ensure debt repayments do not exceed 25% of GDP.

Meanwhile, Governor of State Bank of Viet Nam Nguyen Van Binh revealed that the settlement of non-performing loans have reaped positive outcomes.

Credit organizations’ bad debt will be brought down to 3% by the end of 2015 from the current 5.43%, the Government pledged.

The Cabinet said it will also amend relevant legal documents to enhance the efficiency of the Viet Nam Asset Management Company (VAMC) in handling bad debts. The Company was said to buy VND 125 trillion worth of NPLs in the first nine months.

Report showed that the bad debt ratio of the banking system sharply fell from 17% in 2012 to 5.43% in October this year./.

By Hai Minh

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