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Subject
Vietnam's debt difficulties.
Significance
Vietnam's Finance Ministry announced on May 15 that it would continue to use offshore borrowings to fund development projects, although many economists caution that public debt levels are unsustainable, potentially harming Vietnam's image with investors. There are concerns that government liabilities may be higher than reported, and that recent monetary initiatives, including currency devaluations, may aggravate the situation.
Impacts
Borrowing costs will rise, and Vietnam could face a credit downgrade if debt limits are reached.
Foreign investors will respond cautiously to reforms of infrastructure partnership regulations.
Vietnam's ability to capitalise on ASEAN infrastructure integration may be hindered.
Keywords:
Vietnam,
AP,
ASEAN,
China,
economy,
aid,
construction,
debt,
equities,
foreign investment,
foreign policy,
foreign trade,
government,
infrastructure,
integration,
investment,
policy,
private sector,
public sector,
regulation,
industry,
politics
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2015
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