The debt structure of the government shows that domestic debt accounts for 60 percent and foreign debt 40 percent of total debts. 

Rodrigo Cabral, a senior financial expert from the World Bank, said that Vietnam is following the right track, trying to increase borrowing from domestic sources rather than relying on foreign capital. However, he said, it is necessary to diversify the capital channels.

The Ministry of Planning & Investment (MPI) estimates that Vietnam’s public debt would reach VND3,500 trillion in 2018. A report of the National Assembly’s Finance & Budget Committee shows foreign debt increasing, nearly hitting the ceiling of 50 percent of GDP.

Many experts have urged the government to think of measures to exploit the ‘gold mine’ among the public estimated to contain 500 tons or so, worth $60 billion. They suggested resuming the policy that allows people to deposit gold at banks. However, opinions about this vary.

MPI once restricted borrowing from foreign sources and setting limitations on ODA (official development assistance) loans. However, Vietnam later decided to lift the ceiling for ODA loans by VND60 trillion from VND300 trillion to VND360 trillion ($15.41 billion) in the next three years. 

Economists explained that the lifting of the ceiling is necessary to obtain enough capital for development, but warned that any new debt, foreign or domestic, would lead to an increase in the public debt which would be a burden on Vietnamese.

The move, as commented by Nhip Cau Dau Tu, shows that there are other challenges.

Bui Trinh from the Vietnam Institute for Development, in his recent research, found evidence that the majority of people don’t have savings and many of them have to borrow money to cover their daily basic needs.

According to Trinh, the income from production of the entire economy is equal to 94 percent of final consumption. If deducting expenditures on social insurance and trade union fees, the figure would be below 90 percent. 

He estimates that the ratio of income from production to total income has decreased from 74-75 percent in 2012 to 53 percent in 2016.

In 2016, Vietnam’s GDP per capita was $2,188 and the total income per capita was $1,648. If compared with 2012, though the GDP per capita increased by 25 percent, the income from production per capita rose by 1.2 percent only.

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