The country’s external debt compared to its GDP at the end of 2023 is 37-38 percent (Illustrated image)

Accordingly, in the report on public debt situation in 2023, with an estimate for 2024, and the summary after 3 years implementing the 5-stage plan on borrowing and repaying public debt in the 2021-2025 period sent to the Standing Committee of the National Assembly, the total repayment amount in 2023 of the Government reaches VND311.5 trillion (US$12.77 billion).

The direct debt repayment is VND279.7 trillion ($11.46 billion), accounting for 95.3 percent of the estimate. The repayment of foreign loans for re-lending is VND31.8 trillion ($1.3 billion), occupying 93.8 percent of the plan.

As the currency exchange rates fluctuated in 2023, there is less use of VND to buy foreign currencies to pay back debt than estimation.

The country’s foreign debt balance in 2023 is expected to be 37-38 percent of its GDP at the end of 2023, ensuring that this is within the debt ceiling approved by the National Assembly (at a half of the national GDP).

It is estimated that the limit for foreign commercial loans of businesses and credit organizations under the self-borrowing and self-repaying model in 2023 is equivalent to 100 percent of the approved limit by the Prime Minister, with a scope of about 26-27 percent of GDP.

In particular, the medium and long-term external commercial loans are limited to $7.5 billion, and the short-term loan balance increases by 20 percent compared to the end of 2022.

The nation’s debt repayment is estimated to be 7-8 percent of the export turnovers of goods and services in 2023 (excluding the obligation to pay back short-term principle debts under 12 months), compared to the limit of 25 percent approved by the National Assembly.

The Government reports that all debt targets until the end of 2023 are within the debt ceiling as well as the safety warning threshold decided by the National Assembly.

Besides the public debt/GDP of 39-40 percent, the Government debt/GDP is 36-37 percent, the Government's direct debt repayment obligation/state budget revenue is 20-21 percent, and the nation’s external debt repayment obligation/export turnover is 7-8 percent.

Source: SGGP