Assessment of Vietnam’s public debt in the current period

Abstract

The article is based on secondary data collected from the Financial Statistical Yearbook of the Ministry of Finance and utilizes descriptive statistical methods to assess the current state of Vietnam's public debt in the current period on three aspects consisting of government debt, governmentguaranteed debt, and local government debt. On that basis, the author employs indicators to evaluate the level of the public debt of Vietnam over the period 2006-2019, and assesses the sustainability and safety of Vietnam's public debt compared to those of other countries in the ASEAN region. Research results show that although public debt in Vietnam is still within the allowable ceiling, it has shown signs of increasing in recent years, and the Government has failed to reach the target of maintaining government debt at less than 50%/GDP. The main reason for the increase in government debt stems from the budget deficit, inefficient public spending and public investment, causing loss and waste of investment capital, putting Vietnam into a double deficit of high public budget deficit and spending deficit in recent years. More importantly, the public debt ratio of Vietnam is also relatively high compared to other countries in the ASEAN region, indicating that public debt is posing potential risks to the economy. On that basis, the article also analyzes the causes of high public debt, from which a number of recommendations are proposed to help control the issue in Vietnam.