Vietnam to cap public debt at 60% of GDP through 2030, says government

Vietnam will cap public debt at 60% of its gross domestic product through 2030, the government has announced.

The South-East Asian country will consider issuing sovereign bonds to compensate for the budget deficit, restructure government debt and to fund development projects when conditions are favourable, the government said in a statement.

Vietnam’s public debt-to-GDP ratio was 43.7% at the end of last year.

Its investment minister in November said the country was considering raising the ceiling on its public debt from the current level of 60% of GDP to shore up an economy hit by the coronavirus.

Meanwhile, Vietnam also plans to raise its minimum wage by 6% from July to help workers weather the impact of the Covid-19 pandemic, the government had announced earlier.

Under the plan, pending approval from the prime minister, the minimum monthly wage would be raised to between 3.25 million dong and 4.68 million dong ($142.00-$204.47), the government said in a statement.

This would be the first minimum wage hike in two years in the South-East Asian country, which is a regional manufacturing powerhouse with a population of 98 million, according to the statement.

“A proportion of labourers are facing difficulties due to the pandemic, and therefore an increase in the minimum salary at this time is needed to help them stabilise their life and stay with their employers,” head of Vietnam General Confederation of Labour, Ngo Duy Hieu, said in the statement.

Vietnam Chamber of Commerce and Industry, which represents businesses in the country, said firms would try to increase their productivity to help fund the wage hike, according to the statement.

Reuters – April 16, 2022