World Bank statistics show that Vietnam’s private debts are the highest in the region, leading to warnings about banks’ bad debts.

The rate has increased sharply from 35 percent in 2000 to 71.2 percent in 2006, 93.4 percent in 2007, 90.2 percent in 2008, 112.7 percent in 2009 and 125 percent in 2010.

Experts say that this is due to the real estate bubble and the rising price of land and credit used for real estate.

Some analysts say that there is an increase in the number of credit ogranisations, driving up total credit. In addition, Vietnam’s growth in recent years has depended primarily on investment.

Economist Bui Kien Thanh said banks should pay more attention to businesses’ bad debts to have suitable solutions.

Vietnam’s GDP is now around US$106 billion, which means private debt is more than US$131 billion. With current interest rates, businesses have to pay more than US$20 billion in interest on loans each year and they find it difficult to clear both debts and interest payments on time due to the current difficult economic situation.