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Thursday, June 13, 2024

Vietnam’s public debt drops sharply

By Van Phong

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HCMC – Vietnam’s public debt amounted to US$157 billion in 2021, or 43.1% of gross domestic product (GDP), lower than the 62.2% in 2016.

Vietnam’s public debt at the end of 2021 was way below the 60% cap targeted by the National Assembly, according to the Ministry of Finance.

Between 2017 and 2021, the central government debt-to-GDP ratio fell by 12.6%, followed by a 5.3% drop in government-guaranteed debts and a 0.5% decline in provincial debt.

Accordingly, central government debt, government-guaranteed debts and provincial debts were equivalent to 39.1%, 3.8% and 0.6% of GDP at the end of 2021, respectively.

From 2017-2021, the ratio of foreign debt to GDP decreased from 49% to 38.4%.

Domestic debt rose sharply, accounting for 67.2% of the total government debt.

The rise was attributed in part to the mobilization of loan capital through issuing domestic bonds, as well as funding from official development assistance and foreign concessional loans.

Foreign and government loan repayments increased slightly, accounting for 6.8% of total export earnings and 21.8% of budget revenue in 2021, respectively.

Japan was Vietnam’s largest bilateral lender in 2021, with a loan of more than VND316 trillion, followed by South Korea (VND32 trillion), France (VND30 trillion) and Germany (VND14.3 trillion).

With loans totaling over VND380 trillion from the World Bank and VND188 trillion from the Asian Development Bank, these institutions were the leading multilateral lenders of the country.

The government plans to complete the repayment of VND335,815 billion (US$14.6 billion) in 2022. The total government repayment over the following three years will surpass VND1.1 quadrillion.

The government also intends to borrow a total of VND673,546 billion (US$29.3 billion) in 2022, according to the plan approved by Deputy Prime Minister Le Minh Khai.

Between 2022 and 2024, the total amount borrowed by the government will reach VND2 quadrillion. Some 96% of this is for budget loans, with the rest for on-lending.

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