The proposed borrowing is VND55 trillion higher than the level earlier approved by the National Assembly and VND71.67 trillion above the actual borrowing in 2023.

This proposal was included in a report submitted to the Standing Committee of the National Assembly, detailing the state of public debt in 2023 and plans for 2024.

The primary sources for the proposed loans will be bond issues, official development assistance (ODA), and foreign concessional loans. The Government also mentioned that additional legal financial sources could be tapped if required.

According to the proposal, public debt for 2024 is estimated to account for 39-40% of the country’s gross domestic product (GDP). The Government’s debt is projected to make up 37-38% of GDP, while foreign debt will represent 38-39% of GDP. The direct debt repayment obligations are expected to stay within 24-25% of the budget revenue, in line with National Assembly limits.

In 2024, the Government aims to repay around VND395.9 trillion, which is over VND84.3 trillion higher than in 2023. Nearly 73% of this sum will go toward repaying principal, while the remainder will cover interest.

For 2024, the Government has decided not to issue new guarantees for domestic or foreign loans for programs or projects. The outstanding guarantees for domestic business loans are expected to be around VND9.1 trillion, while foreign loan guarantees will exceed VND88.4 trillion.

Local governments are projected to run a deficit of VND26.5 trillion in 2024. They intend to borrow VND30.6 trillion, primarily from sources like ODA, foreign concessional loans, and other domestic channels. The total debt repayment for local governments is projected to exceed VND4.1 trillion, resulting in an outstanding debt at year-end that is 23 times the repayment amount, totaling over VND96 trillion.

The Government foresees medium- and long-term net capital withdrawals in the range of US$7.5 billion and US$8.5 billion. Short-term foreign debt is expected to increase by 15-18% compared to the end of 2023.

All debt safety indicators in 2023 are expected to remain within the National Assembly’s prescribed limits, including budget deficit at 4% of GDP and direct debt repayment obligations at 20% of total budget revenue.

The country’s planned foreign debt repayment for the next year is anticipated to be equivalent to 7-8% of revenue generated from exporting goods and services. This repayment rate adheres to the National Assembly’s safety limit of 25%.

Source: Saigon Times