As of the end of 2014 we estimate that public & publicly guaranteed debt (PPG) will account for 60.3% of GDP under local rules. Under IMF rules we estimate it will come to a lower 55.5% of GDP. Of this, we estimate that external debt accounts for 25.2% of GDP under IMF rules.
The difference between the two is that under IMF rules, domestic public debt is defined as that debt funded by Tbill, Tbonds, and other sources (SCIC purchased bonds, bank advances). However, under the local rules, domestic debt also includes debt from the sinking fund and treasury lending. We think that domestic debt under the local rules is double counted in place.
Specifically, (1) domestic debt funded by the Treasury is essentially also part of government bond; (2) domestic debt funded by the sinking fund is also part of the government’s foreign debt. If MOF were to adjust for these items to match IMF rules, this would result in a significant lowering of the stated burden.
These submissions are extracted from reports accomplished by Ho Chi Minh City Securities Corporation (HSC)’s Research Division team led by Fiachra Mac Cana, Managing Director, Head of Research
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