Next year, the Government plans to borrow more than VND676 trillion, equivalent to about USD27.5 billion, to cover the budget deficit, repay principal and lend on.
This content is stated in the report sent to the National Assembly Standing Committee on the public debt situation in 2023, the borrowing and debt repayment plan in 2024. The Government's plan is higher than the borrowing level approved by the National Assembly and the actual borrowing amount in 2023, respectively 55,000 billion VND and 71,670 billion.
Similar to previous years, the main source of funding for the above loans is bond issuance, ODA loans and foreign incentives. If necessary, other legal financial sources will be mobilized.
According to the report, the direct debt to be paid next year is about VND 395,900 billion, an increase of more than VND 84,300 billion compared to 2023. Of which, nearly 73% is principal repayment, the rest is interest payment.
About VND58,300 billion will be repaid by the Government for re-lending, of which more than 96% will be repaid principal. With this debt repayment level, the direct debt repayment target compared to budget revenue is within the ceiling of 25% approved by the National Assembly.
Regarding government guarantees, in 2024, no new guarantees will be considered for programs and projects to borrow domestic and foreign capital. Outstanding guarantees for domestic loans for enterprises are about VND 9,100 billion, and guarantees for foreign loans are more than VND 88,400 billion.
Transaction at a bank branch in Ho Chi Minh City, November 2022. Photo: Thanh Tung
According to the Government's calculations, the local budget in 2024 is expected to have a deficit of VND 26,500 billion. Localities will borrow about VND 30,600 billion, mainly from ODA loans, foreign preferential loans from the Government and other domestic sources. The total debt repayment of localities is more than VND 4,100 billion; the outstanding debt at the end of the year is 23 times the debt repayment, over VND 96,000 billion.
Regarding foreign debt under the self-borrowing and self-repayment method, the Government said that the expected medium- and long-term net capital withdrawal is about 7.5-8.5 billion USD, the growth rate of short-term foreign debt is about 15-18% compared to the end of 2023.
With the above borrowing and debt repayment plan, the public debt level in 2024 will be about 39-40% of GDP, government debt 37-38% of GDP, and the country's foreign debt 38-39% of GDP. The Government's direct debt repayment obligation compared to budget revenue is 24-25%, ensuring it is within the ceiling and threshold allowed by the National Assembly.
Previously, the Government said that in 2023, public debt safety indicators will ensure the safety threshold decided by the National Assembly. Specifically, the budget deficit is estimated at 4% of GDP, public debt is about 39-40% of GDP. Government debt is 36-37% of GDP and the country's foreign debt is 37-38% of GDP.
The Government's direct debt repayment obligation is about 20-21% of total budget revenue. The country's foreign debt repayment is about 7-8% of total export turnover of goods and services, ensuring within the limit allowed by the National Assembly (25%).
2024 is still considered a difficult year for countries around the world when global inflation tends to slow down but is still higher than the target in many countries; economies continue to tighten monetary policies to control inflation. Domestically, Vietnam has many prospects to improve economic growth rate by promoting public investment, consumption, and tourism.
As a highly open economy, Vietnam still faces many difficulties in achieving growth targets, ensuring energy balance, and implementing international commitments on net emissions and green growth.
The Government plans to submit to the National Assembly next year's growth target of about 6-6.5% - equal to the target for 2023. The 2024 state budget is estimated at 1.65 quadrillion VND, an increase of 0.03 quadrillion compared to the estimated implementation this year (over 1.62 quadrillion VND).
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