Vietnamese person bears 37 million VND of public debt

With the GDP scale of 2021 reaching 368 billion USD, the absolute public debt/GDP of Vietnam is estimated at 158.6 billion USD. Compared to the population as of December 31, 2021, about 98.5 million people, the public debt/person in Vietnam is about 37 million VND.

According to the Public Debt Bulletin of the Ministry of Finance recently released, Vietnam’s public debt in 2021 will decrease to only 43.1% from 55.9% in 2020 and the highest level of 61.4% in 2017. This is a good sign for the economy. The public debt of Vietnam is also much lower than the ceiling of 60% of GDP allowed by the National Assembly.

With the GDP scale of 2021 reaching 368 billion USD, the absolute public debt/GDP of Vietnam is estimated at 158.6 billion USD. Compared to the population as of December 31, 2021, about 98.5 million people, the public debt/person in Vietnam is about 37 million VND.

A good point is that the government debt/GDP ratio has decreased sharply over the years from 51.7%/GDP (in 2017) to 39.1%/GDP (in 2021); Meanwhile, government-guaranteed debt of businesses and government-affiliated organizations decreased from 9.1%/GDP (in 2017) to 3.8%/GDP (in 2021), the country’s external debt to by the end of 2021, there will be 38.4% of GDP compared to 49% of GDP in 2017…

Compared to 5 years ago, when Vietnam’s public debt ratio exceeded the ceiling of over 61.4%, the public debt ratio in 2021 will drop to 43.1%/GDP which is a good thing. However, in terms of absolute public debt, Vietnam’s public debt/GDP has increased rapidly in recent years, from 137.4 billion USD in 2017 to 158.6 billion USD in 2021.

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After 5 years (2017-2021), the absolute public debt of Vietnam increased by 21.2 billion USD, the average public debt increased by 4.2 billion USD per year. Since then, the amount of public debt per person has also increased, despite the sharp decrease in the public debt/GDP ratio.

If in 2017, Vietnam’s public debt/person was only 33.7 million VND/person, in 2021, Vietnam’s public debt/person has reached 37 million VND/person. In 2018 and 2019, the average public debt reached 34 million VND/person, in 2020 the public debt is about 35.3 million VND/person.

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According to economic experts, the decrease in the ratio of public debt to GDP is due to the rapid increase in the scale of Vietnam’s GDP recently. In the five years from 2017 to 2021, GDP will increase 1.6 times, increasing by 114 billion USD. Meanwhile, the absolute public debt increased by 21.2 billion USD, about 1.1 times, not much compared to the increase in GDP, thus causing the public debt/GDP ratio to decrease.

However, the main concern is that Vietnam’s population has increased by 4.8 million people in the past 5 years, an average increase of nearly 1 million people per year, but the amount of public debt has not decreased. Figures of absolute public debt in the 5-year period 2017-2021, increased by 21.2 billion USD, averaged over 4.2 billion USD/year.

The Ministry of Finance also said that the national public debt and foreign debt targets for 2021 are calculated on the basis of GDP in 2021 announced by the Ministry of Planning and Investment.

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Notably, foreign debt decreased while domestic debt increased. By the end of 2021, foreign debt will be about 1,075 million billion VND; domestic debt increased to more than 2.2 million billion dong, accounting for 67.2% of outstanding government debt.

According to the Ministry of Finance’s report, by 2021, Vietnam’s largest bilateral creditor is Japan with more than 316 trillion VND, South Korea, France and Germany lent more than 32,000 billion VND, 30,000 billion VND and 14,000 billion VND, respectively.

In terms of multilateral partners, the World Bank topped the list of creditors with more than 380,000 billion VND, followed by the Asian Development Bank (ADB) with more than 188,000 billion VND.

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@ Cafef

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