According to the Government's report on the public debt situation in 2024, it is expected that by the end of this year, the country's foreign debt will be about 32-33% of GDP, much lower than the ceiling of 50% as targeted in Resolution 23 of the National Assembly.

ODA loans and preferential loans from foreign donors are about 31,280 billion VND, of which loans for re-lending are estimated at 10,745 billion VND. The foreign loans being disbursed are mainly previously signed by the Government with long terms and low interest rates (the average weighted interest rate of the foreign loan portfolio is currently about 1.9%/year).

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It is expected that by the end of 2024, the country's foreign debt will be around 32-33% of GDP. Photo: Hoang Ha

In the first 9 months of the year, the Government signed ODA loans and foreign preferential loans with a total value of 638.8 million USD. It is expected that in 2024, it will complete the negotiation and signing of 14 ODA loan agreements and foreign preferential loan agreements with a total value of 1,500 million USD.

However, foreign borrowing costs are higher than the average domestic borrowing costs. The lending interest rates of the two largest multilateral organizations (WB and ADB) fluctuate between 5.91-6.5%/year.

The disbursement rate of foreign capital projects in the first 9 months is estimated to have reached only 24.33% of the plan assigned by the Prime Minister. The subjective reason is that the legal system is still being perfected, problems related to public investment and bidding have not been thoroughly resolved, while there is pressure from donors to apply international standards.

It is expected that by the end of 2025, public debt will continue to be around 36-37% of GDP as in 2024; government debt will be 34-35% of GDP (33-34% of GDP in 2024); and the country's foreign debt will be around 33-34% of GDP (32-33% in 2024).