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reached a warning level, but it is neccesary to pay much
FIGURE 2: VIET NAM’S CURRENT ACCOUNT
(USD Million) more attention especially when the transport and tourism
industries have not been restored, and the deficit may
continue to increase.

High increase of budget deficit and public debt
Due to the impact of COVID-19, the governments of
all countries had to increase spending, while reducing
the economy as a result of social distancing, making
government debt in many countries increase to a record
high. According to IMF, the recommended threshold for
budget deficit and public debt is: Public debt must not
exceed 50% of GDP, budget deficit must not exceed 5% of
Source: The State Bank of Viet Nam (2021) GDP (for developing and transition countries).
In Viet Nam, according to the Resolution of the 15th
a sharp fall in the third quarter. However, by the end of National Assembly dated July 28th, 2021 on the national
November and at the beginning of December 2021, the financial plan and public debt borrowing and payment
epidemic tended to increase again, posing a very difficult for the 2021-2025 period: (i) The annual public debt ceiling
problem of how to both control the disease and realize must not exceed 60% GDP, the warning threshold is 50%
economic growth goals. GDP; (ii) The annual government debt ceiling must not

Current account deficit exceed 50% GDP, the warning threshold is 45% GDP; (iii)
The government’s direct debt payment obligations are
By the end of the second quarter of 2021, Viet Nam's not to exceed 25% of total State budget revenue.
current account is at USD-4,596 billion, of which, the According to statistics, in Viet Nam, the State budget
trade balance of goods is USD-354 million, the balance of deficit to GDP, public debt to GDP, and government debt
services (transportation, tourism, other services) is USD to GDP in 2020 were 3.5%, 43.5% and 38.6%, respectively,
-3.868 billion, the balance of income (remittances, income according to adjusted GDP. In 2021, the ratios of public
from investment) is USD-3.87 billion, the balance of one- debt and government debt are projected at 46.1% and
way current transfer (non-refundable aid, gifts, and other 41.9%, respectively, according to adjusted GDP; and at
transfers in the form of public sector transfers, private 58.6% and 53.2%, respectively, according to unadjusted
sector transfers) was USD 3.496 billion (SBV, 2021). GDP... In the near future, these indicators may continue to
As recommended by international organizations, for increase if the economic situation has not been improved
developing countries, when the current account deficit again and the epidemic has not been effectively controlled.
to GDP ratio reaches 5%, it is a warning threshold. Compared to other countries in the world, Viet Nam's
Therefore, Viet Nam's current account deficit has not public debt to GDP is not among the top. Moreover,
in the context of the
epidemic, the public debt
FIGURE 3: THE RATIO OF NON-PERFORMING LOAN TO TOTAL LOANS (AS OF JUNE 30 , 2021)
st
of all countries tends
to increase. However,
it is important to note
that the public debt can
increase but we must
ensure effective and
focusing spending in
order to minimize loss
and corruption.
Sharp increase in private
debt

According to statistics
from the State Bank of
Viet Nam, the ratio of
credit over the GDP is at
140%, making Viet Nam
one of countries which
Source: http://data.ibt.org.vn have highest ratios based

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