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Vietnam raises borrowing to $2 billion to fund widening deficit
Vietnam raised borrowing to VND35.2 trillion (US$2 billion) in the first seven months to fund a widening budget deficit, a finance ministry official said Wednesday.
Borrowing has increased because the government needs to raise money to fund measures to support the economy, Nguyen Thanh Do, head of the ministry’s debt management department, said by telephone from Hanoi. He wasn’t able to provide equivalent figures for the same period last year.
Economic growth quickened to 3.9 percent in the second quarter after the government put in place a package of stimulus measures that it values at about $8 billion. Gross domestic product expanded 3.1 percent in the first three months, the slowest on record.
The World Bank raised its forecast for this year’s budget deficit to 12 percent of GDP, from 8.3 percent previously, according to a report released in June. Vietnam will try to restrict the shortfall to 7 percent of GDP this year, the National Assembly said in June.
Borrowing so far this year includes VND4.2 trillion ($245 million) from international organizations including the World Bank and the Asian Development Bank, and VND31 trillion ($1.8 billion) from domestic bond sales, Do said.
As of July 31, the government spent about VND10.3 trillion ($602 million) of the proceeds from bond sales on infrastructure projects, 29 percent of what it plans to spend for the whole year, according to a statement from the finance ministry.
Prime Minister Nguyen Tan Dung last month urged ministries and provinces to accelerate the disbursement of monies from bond sales for the building of roads, bridges, schools and hospitals.
THANHNIEN, BLOOMBERG
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