Vietnam has a relatively stable fiscal outlook.

Paulo Medas, head of the IMF's Article IV advisory team, spoke at the seminar.

As part of the working program with the International Monetary Fund (IMF) Article IV Consultative Group, on the afternoon of June 24th, the Ministry of Finance and the IMF jointly organized a seminar on the IMF's analysis of fiscal issues.

At the seminar, experts from the IMF presented on three topics: the sustainability of public debt and access to capital in the market for various countries, as well as a preliminary assessment of public debt sustainability based on updated data provided by the Ministry of Finance; fiscal transparency and sharing of experiences from countries in improving fiscal reporting and the benefits of enhanced fiscal transparency; and challenges facing the government bond market in Vietnam and IMF recommendations for the development of the government bond market in Vietnam.

Attending the seminar were economic experts from the IMF; representatives from several units of the Ministry of Finance, the Ministry of Planning and Investment , and the State Bank of Vietnam.

Representatives from the Department of Debt Management and External Finance, the State Budget Department, the State Treasury, the Banking and Finance Department (Ministry of Finance), and representatives from the Ministry of Planning and Investment also exchanged information with the IMF on issues related to public debt, government bonds, and state budget transparency.

Regarding the sustainability of public debt, IMF experts assessed that, based on their analysis, Vietnam's fiscal outlook is generally stable. Vietnam's economic growth rate is relatively strong and high compared to other emerging countries. Vietnam's medium-term public debt remains within manageable limits.

According to Paulo Medas, Head of the IMF's Article IV Consultative Team, in recent times, due to the impact of several shocks, the public debt levels of most countries in the Asian region have been relatively high, with some countries doubling or more than doubling their debt. However, Vietnam is one of the exceptions, maintaining a sustainable and relatively low debt level compared to some other countries in the region. The IMF representative also stated that some of the difficulties and challenges Vietnam is facing are common trends in Asia. However, Paulo Medas noted that a particularly important issue in Vietnam is the very low tax revenue compared to other countries in the world. The aging population also increases pressure on the government's public spending…

Regarding the development of the government bond market, according to Ms. Ho Viet Huong, Head of the Financial Market Department, with the support of the World Bank, in 2018, Vietnam built a legal framework for the bond market, which included the government bond market. From that time, many fundamental elements for the development of this market were established, including diversifying the investor base and the need for a yield curve based on market factors, etc.

Although the current supply of government bonds in Vietnam is limited, as analyzed by the IMF, Ms. Huong believes that Vietnam has achieved some successes by adopting a cautious approach and maintaining a low debt-to-GDP ratio, thus improving the government's credit rating year after year. According to Ms. Huong, in recent years, Vietnam has had efficient state budget revenue collection, well-controlled state budget expenditures, and low principal repayments, therefore it has not issued many government bonds and has not yet reached any interest rate ceiling. In reality, the amount issued depends on the government's borrowing needs. Furthermore, Vietnam has not issued government bonds across the entire interest rate range…

Source: https://laodong.vn/kinh-doanh/chuyen-gia-imf-viet-nam-co-trien-vong-tai-khoa-tuong-doi-on-dinh-1357126.ldo