Ensuring safe and sustainable public debt control

VCN - Truong Hung Long, Director of Department of Debt Management and External Finance (Ministry of Finance), spoke with Customs News on issues in the implementation of the Public Debt Strategy in the period of 2021-2030.
Truong Hung Long, Director of Department of Debt Management and External Finance (Ministry of Finance),
Truong Hung Long, Director of Department of Debt Management and External Finance (Ministry of Finance),

Could you tell us about the basic and general contents of the Public Debt Strategy to 2030?

The Prime Minister signed and promulgated Decision No. 460/QD-TTg, approving the public debt strategy to 2030. The strategy implemented Resolution 07-NQ/TW of the Politburo on the policy of restructuring the state budget and managing public debt towards a safe and sustainable national finance.

Accordingly, the Strategy stipulates mobilizing, managing and using public debt capital from now to 2030, through the following objectives; mobilizing capital for development investment of the economy within a balanced framework between the management of the state budget; mobilizing capital for development investment based on the general structure of the Government, and ensuring safe and sustainable control of public debt.

Furthermore, Resolution No. 07 of the Politburo stipulates that it is important to focus on mobilizing domestic capital sources, foreign capital and combining these two sources. In addition, it is necessary to strictly control and effectively use these capital sources, enhance the publicity and transparency of public debt sources, and control public debt within the allowable threshold on the basis of controlling budget deficit as well as budget expenditure structure in the period from 2021 to 2030.

What are the basic targets of public debt set to 2030?

In the Public Debt Strategy for the 2021-2030 period, the objective is that by 2030, Vietnam will control public debt at no more than 60% of GDP (it was 65% in the period 2016-2020) and Government debt should not exceed 50% of GDP (it was no more than 55% in the period 2016-2020). In the period 2021-2025, with a public debt ceiling of 60% of GDP, the threshold is set at 55% of GDP; if the government debt exceeds 50% of GDP, the threshold is 45% of GDP. This means that when the public debt reaches 55% and the government debt is at 45%, we will begin to take measures to control public debt within the permitted range, reduce the tasks of spending, control the state budget deficit, suggesting solutions to limit the increase in budget expenditures.

Is there any new point in the allocation of the central budget and local budget for public debt?

In the period 2016-2020, budget deficit was controlled at an average of 3.9% of GDP; the state budget deficit will be controlled at 3.7% of GDP in the period 2021–2025. In particular, the central government budget deficit is 3.4% of GDP and local budget deficit is 0.3% of GDP. It means that ministries, sectors and localities are allowed to use public debt capital. However, the mobilization of public debt capital to serve the investment objectives of the budget will be allocated following the structure of the budget. In the range of locality, all localities are used at 0.3%. The mobilization of domestic capital, as well as foreign capital for local investment projects, must be based on the above objectives.

In the context of world economic fluctuations, along with the impact of the Covid-19 pandemic, what will be the challenges in implementing public debt targets.

In the periods from 2021 to 2030, especially between 2021 to 2025, the global and domestic economic context will have a great impact on capital mobilization. Firstly, in the period of 2021 - 2025, Vietnam will no longer be able to borrow ODA from the World Bank and IDF from the Asian Development Bank. Furthermore, Vietnam must access concessional loans. In the near future, Vietnam will no longer have preferential loans. They must approach the market with foreign capital.

Secondly, Resolution No. 07 of the Politburo sets out the mission of developing the domestic capital market and considers this capital as fundamental. The task set is to develop the domestic capital market, ensure abundant capital, control the domestic capital market well, and reduce borrowing costs.

Thirdly, in terms of the use of capital, when Vietnam is no longer borrows ODA and switches to commercial loans, it will have to bear the risks of currency, interest rates and other loan conditions. At that time, it is necessary to have measures to manage and handle those risks.

In order to fulfill the above objectives and tasks, what are the solutions that have been and will be applied by the management authorities?

To manage public debt, the Department of Debt Management and External Finance is currently using two public debt management models, namely the Medium Term Debt Strategy model on the WB's debt management plans and Debt Sustainability Analysis (DSA) model. This is one of the major debt management models, closely related to the task of analyzing, forecasting and performing risk management of debt portfolio in order to ensure public debt safety and national financial security. Through the use of these two management models, the Department has built, researched and analyzed public debt management scenarios up to 2030 to choose the most appropriate scenario for current conditions, as well as meet the requirements of public debt management. In addition, suggesting solutions to implement the public debt strategy by 2030 which are highly feasible, with a "buffer" in the treatment plan.

In fact, after the 2016-2020 period, the Department strongly reformed public debt management and controlled public debt. Vietnam's public debt balance is relatively large, resulting in relaxation in the implementation of public debt management policies. As a result, public debt in Vietnam is now about 43.7% of GDP, while the allowable public debt ceiling is 60%. If adding the implementation of the Government's stimulus packages, the public debt will also increase to about 45% of GDP.

With the clear direction of the Politburo in Resolution No. 07. as well as of the Government in the Public Debt Strategy to 2030, and with the determination of all levels and sectors, we believed that we will control the public debt situation by 2030.

Thank you!

By Thu Hiền/Thanh Thuy

Related News

Binh Dinh Customs: revenue collection increases sharply

Binh Dinh Customs: revenue collection increases sharply

Implementing many solutions to support businesses, and attract import and export goods, the state revenue of Binh Dinh Customs in the first months of 2024 achieved high results.
Da Nang Customs: Sharing experiences about risk management when making customs settlement report

Da Nang Customs: Sharing experiences about risk management when making customs settlement report

VCN - To support enterprises in improving supply chain risk management capacity, on April 16, Da Nang Customs Department collaborated with Vietnam Industry Supporting Alliance (VISA) and InterLOG to hold a seminar with the topic "Customs Settlement Report" for businesses engaged in processing, export production, and export processing activities.
Budget expenditures reached VND393.5 trillion, growing 8.3% over the same period in the first quarter

Budget expenditures reached VND393.5 trillion, growing 8.3% over the same period in the first quarter

VCN - The Ministry of Finance said that the total balance of budget expenditure in March was estimated at VND140.3 trillion; accumulated budget expenditures in the first quarter of 2024 reached VND393.5 trillion, equal to 18.6% of current appropriation, an increase of 8.3% over the same period in 2023.
Accelerate disbursement from solutions of Treasury system

Accelerate disbursement from solutions of Treasury system

VCN - One of the nine key tasks set by the State Treasury system in 2024 is to strictly control payment in compliance with the law and to strengthen coordination with relevant units to promptly remove problems and speed up the disbursement of public investment capital.

Latest News

Savings of individual customers at banks hit record high

Savings of individual customers at banks hit record high

In spite of low interest rates, figures from the State Bank of Vietnam (SBV) released this week show deposits of individual customers increased by more than VNĐ39.7 trillion in April, to reach more than VNĐ6.7 quadrillion.
Managing fiscal policy has achieved many positive and comprehensive results

Managing fiscal policy has achieved many positive and comprehensive results

VCN - On July 15, the Ministry of Finance held an online conference to summarize state budget financial work in the first 6 months of the year, implementing tasks in the last 6 months of 2024. Minister of Finance Ho Duc Phoc attended and directed the conference. Also attending the Conference were Deputy Ministers of Finance, leaders of units under the Ministry of Finance.
Determine tools, policy for inflation control

Determine tools, policy for inflation control

VCN - According to economic expert Associate Professor, PhD. Ngo Tri Long (photo), former Director of the Price Market Research Institute (Ministry of Finance), inflation is an issue that needs special attention, especially related to the management of monetary policy, interest rates, increasing prices of goods and services...
The impact of wage increases on inflation will not be too significant

The impact of wage increases on inflation will not be too significant

VCN - Addressing concerns related to wage and price increases, Dr. Nguyen Duc Do, Vice Director of the Institute of Economics - Finance (Finance Academy), believes there are not many factors causing sudden price surges in the last 6 months of 2024. Therefore, it can be expected that the rate of price increases in the last 6 months will be comparable to that in the first 6 months of 2024.

More News

Imposing and raising special consumption tax contributing to change consumption behavior

Imposing and raising special consumption tax contributing to change consumption behavior

VCN - At the Workshop on Comments on Completing the Revised Law on Special Consumption Tax (SCT) organized by the Vietnam Confederation of Commerce and Industry (VCCI) on July 11, many experts and businesses contributed their opinions to clarify the importance and impact of the revised special consumption tax law, which emphasizes the addition of taxable areas or tax increases to change society's consumption behavior.
The local Finance sector is flexible and strict in managing budget revenues and expenditures

The local Finance sector is flexible and strict in managing budget revenues and expenditures

VCN - Although the forecast for the last 6 months of the year will still have many difficulties and challenges, the Finance sector in all localities expressed their determination to strive to achieve and exceed estimates, while strengthening the prevention of revenue loss and handling tax debt recovery, etc.
Finance industry excellently accomplishes financial and budget tasks in the first half of 2024: Minister Ho Duc Phoc

Finance industry excellently accomplishes financial and budget tasks in the first half of 2024: Minister Ho Duc Phoc

VCN - The Finance industry excellently accomplishes financial and budget tasks in the first half of 2024, said by Minister of Finance Ho Duc Phoc at the Online conference to review performance of financial and budget tasks in the first half of 2024 and set out tasks for the second half of the year.
Mobile Money users in Vietnam rise rapidly

Mobile Money users in Vietnam rise rapidly

The number of Mobile Money service users in Vietnam reached more than 8.8 million customers by the end of May, an increase of 3.3% over the same period last month.
Foreign service providers have paid VND4,039 billion of tax in the first half of 2024

Foreign service providers have paid VND4,039 billion of tax in the first half of 2024

VCN - In the first six months of 2024, there are 26 foreign service providers newly registered, declared and paid tax in Vietnam.
Continue to warn about forms of fraud against taxpayers

Continue to warn about forms of fraud against taxpayers

VCN - In response to the increasing prevalence of sophisticated scams targeting taxpayers, the General Department of Taxation (GDT) has issued directives to tax authorities nationwide to strengthen individual income tax management and provide warnings and preventive measures to help taxpayers remain vigilant and protect themselves from fraudulent activities.
Under amended law, it needs clarification on cooperation between commercial banks and insurance companies

Under amended law, it needs clarification on cooperation between commercial banks and insurance companies

VCN - Banks and insurance businesses have different understandings of the regulations in the Law on Credit Institutions 2024.
Corporate bond issuance soars in comparison to 2023

Corporate bond issuance soars in comparison to 2023

VCN - According to the Ministry of Finance, from the beginning of the year to June 21, 2024, 41 enterprises have issued private corporate bonds with a total value of VND 110.2 trillion.
Tax debt recovery is estimated to achieve VND 45,468 billion

Tax debt recovery is estimated to achieve VND 45,468 billion

VCN - In the first half of 2024, tax authority at all level has issued 16,859 notifications on temporary exit suspension and recovered VND918.7 billion of tax debt from 1,482 taxpayers.
Read More

Your care

Latest Most read
Savings of individual customers at banks hit record high

Savings of individual customers at banks hit record high

In spite of low interest rates, figures from the State Bank of Vietnam (SBV) released this week show deposits of individual customers increased by more than VNĐ39.7 trillion in April, to reach more than VNĐ6.7 quadrillion.
Managing fiscal policy has achieved many positive and comprehensive results

Managing fiscal policy has achieved many positive and comprehensive results

Ministry of Finance held an online conference to summarize state budget financial work in the first 6 months of the year, implementing tasks in the last 6 months of 2024.
Determine tools, policy for inflation control

Determine tools, policy for inflation control

Inflation is an issue that needs special attention, especially related to the management of monetary policy, interest rates, increasing prices of goods and services...
The impact of wage increases on inflation will not be too significant

The impact of wage increases on inflation will not be too significant

VCN - Addressing concerns related to wage and price increases, Dr. Nguyen Duc Do, Vice Director of the Institute of Economics - Finance (Finance Academy), believes there are not many factors causing sudden price surges in the last 6 months of 2024. Theref
Imposing and raising special consumption tax contributing to change consumption behavior

Imposing and raising special consumption tax contributing to change consumption behavior

Many experts and businesses contributed their opinions to clarify the importance and impact of the revised special consumption tax law
Mobile Version