PUBLIC DEBTS MUST NOT EXCEED 65% OF GDP
On May 04, 2013, the Prime Minister signed the Decision No. 689/QD-TTg of May 4, 2013, approving the Program on management of medium-term debts during 2013-2015.
Accordingly, the Program has set the specific objectives during 2013-2015 such as to borrow domestic and foreign loans to offset state budget overspending while gradually reducing state budget overspending to below 4.5% of GDP by 2015, starting with 4.8% of GDP in 2013 and around 4.7% in 2014; public debts (including government debts, government-guaranteed debts and local administrations’ debts) must not exceed 65% of GDP by 2015, specifically, the government debit balance and national foreign debts each must not exceed 50% of GDP; the payable government debts (excluding amounts provided through on-lending) must not exceed 25% of the total annual state budget revenues and the payable annual national foreign debts must be below 25% of the export value of goods and services and the annual state foreign exchange reserve must exceed 200% of the total national short-term foreign debt balance.
Besides, the Prime Minister also requires that in the immediate future, not to consider granting guarantees for the issuance of international bonds. Businesses or commercial banks may issue international bonds, if they so wish, without government guarantees; to consider granting guarantees for domestic loans only for urgent projects and national key works for which the Prime Minister has decided to grant guarantees and to intensify examination, monitoring and supervision of, and take specific handling measures for, government-guaranteed programs and projects facing difficulties in paying due debts to avoid putting pressure on the state budget’s reserve debt liability and so on.
This Decision takes effect on the signing date.
