Within the framework of the working program with the Article IV Consultation Delegation of the International Monetary Fund (IMF), on the afternoon of June 24, the Ministry of Finance and the IMF co-organized a seminar on the IMF's analysis of fiscal issues.
At the seminar, experts from the IMF presented on three topics: Public debt sustainability and access to capital in the market of countries as well as preliminary information on public debt sustainability based on updated data provided by the Ministry of Finance; fiscal transparency and sharing of experiences of countries in improving fiscal reporting and benefits of enhancing fiscal transparency; challenges for the government bond market in Vietnam and recommendations of the IMF for the development of the government bond market in Vietnam.
Representatives of the Department of Debt Management and External Finance, the State Budget Department, the State Treasury, the Department of Banking and Finance (Ministry of Finance) and representatives of 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 content of public debt sustainability, IMF experts assessed that the results of IMF analysis show that, in general, Vietnam's fiscal outlook is relatively stable. Vietnam's economic growth rate is relatively strong and high compared to other emerging countries. Vietnam's medium-term public debt is still under control.
According to Mr. Paulo Medas, Head of the IMF's Article IV Consultation Team, in recent times, due to the impact of several shocks, the public debt level of most countries in the Asian region has been relatively high, some countries have doubled and more than doubled their debt level. However, Vietnam is one of the exceptions when it has maintained a sustainable and relatively low debt level compared to some other countries in the region. The IMF representative also said that some of the difficulties and challenges that Vietnam is facing are quite common in Asia. However, Mr. Paulo Medas said that the particularly important issue is that in Vietnam, tax revenue is very low compared to other countries in the world. The aging population also increases pressure on government public spending...
Regarding the development of the Government bond market, according to Ms. Ho Viet Huong, Head of Financial Market Department, with the support of the World Bank, in 2018, Vietnam built a legal framework for the bond market, including the Government bond market. Since then, many fundamental factors for the development of this market have been built, including diversifying the investor base, needing a yield curve based on market factors, etc.
Although the current supply of government bonds in Vietnam is still limited as analyzed by the IMF, Ms. Huong said that Vietnam has achieved some achievements when applying a cautious approach, maintaining a low debt/GDP ratio, so the Government's credit rating has improved year by year. According to Ms. Huong, in the past few years, Vietnam has had effective state budget revenue, well-controlled state budget expenditure, low principal repayments, so it has not issued many government bonds and so far, Vietnam has not reached any interest rate ceiling. In fact, how much is issued depends on the government's borrowing needs. Besides, Vietnam has not issued government bonds across all interest rate ranges....
Source: https://laodong.vn/kinh-doanh/chuyen-gia-imf-viet-nam-co-trien-vong-tai-khoa-tuong-doi-on-dinh-1357126.ldo
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