Deputy Prime Minister of the Government, Minister of Finance Ho Duc Phoc has just signed report No. 632/BC-CP of the Government to the National Assembly on the public debt situation in 2024, expected in 2025.
According to the report on debt structure, domestic debt is estimated to account for about 76% of outstanding government debt, mainly government bonds; foreign debt is estimated to account for about 24% of outstanding government debt.
Regarding domestic debt, by June 30, 2024, the government bond holding ratio of insurance companies, Vietnam Social Security (VSS), investment funds, and financial companies will reach about 62.5% of total outstanding debt, the rest will be commercial banks, securities companies, investment funds, and other investors.
Regarding foreign debt, the main creditors are bilateral and multilateral development partners such as Japan, Korea, the World Bank, and the Asian Development Bank.
In the first 9 months of the year, the Government signed ODA loans and foreign preferential loans with a total value of about 638.8 million USD, including 1 international loan agreement from the World Bank.
It is expected that by 2024, negotiations and signing of 14 ODA loan agreements and foreign preferential loans with a total value of about 1,500 million USD will be completed. New loans need to be considered for economic efficiency, financial plans, and consistency with the medium-term public investment plan, public debt and budget targets decided by the National Assembly.
The Government affirmed that public debt management closely follows the National Assembly's resolution, ensuring debt safety. The Government debt structure by the end of this year has improved positively.
Government-guaranteed debt is tightly managed, with its proportion decreasing from 3.8% of GDP in 2021 to 2-3% of GDP this year.
In the report, the Government also outlined the plan for borrowing and repaying public debt and foreign debt of the country in 2025.
Regarding capital mobilization, the total government borrowing demand in 2025 is expected to be VND815,238 billion, an increase of 20.6% compared to the government's borrowing plan in 2024.
Of which, central budget borrowing to cover deficit and repay principal is VND 804,242 billion, an increase of 21.9% compared to the 2024 estimate, the rest is foreign borrowing for re-lending.
Mobilized resources flexibly combine government bond issuance tools, ODA loans, foreign preferential loans, and, if necessary, mobilize from other legal financial sources.
Regarding the Government's debt repayment obligations, based on the current Government debt portfolio and the Government's loan mobilization task in 2025, the Government's direct debt repayment obligations are expected to be about VND 468,542 billion (equivalent to about 24% of state budget revenue), of which principal repayment is about VND 361,142 billion and interest repayment is about VND 107,400 billion.
The obligation to repay loans for re-lending is about 38,407 billion VND (repaying principal about 28,054 billion VND, paying interest about 10,353 billion VND).
In the direct debt repayment structure of the Government, domestic debt repayment is expected to account for about 87.5%, the rest is ODA and foreign preferential loan repayment. The source for interest repayment is arranged in the state budget estimate, the source for principal repayment is arranged from new loan mobilization (from domestic loan sources).
The Government said it will ensure public debt borrowing and repayment within the budget approved by competent authorities; closely monitor debt safety indicators to ensure they are within the ceiling and warning thresholds decided by the National Assembly.
Flexibly use appropriate mechanisms, policies and tools in accordance with legal regulations to ensure the goal of mobilizing sufficient domestic and foreign resources for the needs of the state budget.
