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Public debt not to exceed 60% of GDP by 2030

09:52 | 21/04/2022

VCN - Deputy Prime Minister Le Minh Khai has just signed Decision 460/QD-TTg dated April 14, 2022 approving the Strategy for Public Debt to 2030. In which, it is expected that by 2030, public debt will not exceed 60% of GDP and Government will not exceed 50% of GDP.

Accelerating disbursement of public investment capital to realize growth goals Accelerating disbursement of public investment capital to realize growth goals
Financial Strategy to 2030: effectively managing revenue and expenditure, reducing public debts Financial Strategy to 2030: effectively managing revenue and expenditure, reducing public debts
Debt indicators are all within safety margin Debt indicators are all within safety margin
Illustrative Photo: Internet
Illustrative Photo: Internet

The strategy sets specific targets for the 2021-2025 period about control of the state budget deficit target approved by the National Assembly in the state budget estimate and the national financial plan for the 2021-2025 period, ensuring the debt ceiling and threshold within the limits approved by the National Assembly.

The Government's direct debt repayment obligation will not exceed 25% of the total state budget revenue on average; and country's external debt will not exceed 45% of GDP.

Regarding mobilization and use of loan capital, the Government will regularly assess the impacts of loans on public debt, Government debt and debt repayment obligations. In annual state budget management, it is necessary to control the ratio of the State budget deficit and the ratio of direct debt repayment from the budget within the allowable threshold.

In addition, the Government will regularly issue Government bonds with standard terms, mainly long-term of five years or more; flexibly issue less than five-year bonds, issue foreign currency bonds in the domestic market to meet the capital mobilization needs and realize the development target of the Government’s bond market; issue international bonds to offset central budget deficit for development investment and restructure Government debt.

At the same time, the Government will focus on disbursing all signed ODA and concessional loans until the end of 2020. The mobilization of new foreign loans will focus on a few key areas to ensure maximum economic efficiency; and prioritize projects that promote growth associated with sustainable development and have spillover effects such as climate change adaptation, environmental quality improvement, education, healthcare and technology.

The Government will develop a number of public investment programs to implement important and key projects which solve national and regional development problems; and increase the proportion of foreign loans to support the budget to enhance management and use of loan capital.

Strictly control foreign debt

The strategy clearly states that local government debt should be managed within the scope of local budget deficit approved by the National Assembly and within the outstanding loan limit in the State Budget Law.

According to the strategy, the Government strictly controls contingent debt obligations, ensuring the debt repayment source guaranteed by the Government; manages guarantees, in compliance with regulations and within the guarantee limit, focuses on prioritizing capital to guarantee key national programs and projects of which investment policies have been approved by the National Assembly and the Government and the Prime Minister; control the growth rate of Government loans not in excess of the GDP growth rate of the previous year; select a number of infrastructure development projects with a pervasive nature, capable of generating revenue for debt repayment.

Balancing budget and public debt contributes to ensuring national financial security Balancing budget and public debt contributes to ensuring national financial security

In addition, the Government will strictly control foreign debt for self-borrowing and self-payment of enterprises and credit institutions, ensuring that the national foreign debt is within the allowable limit; reform the method of national foreign debt management in accordance with short-, medium- and long-term loans and the nature and level of risks of each debt group; and research and improve institutions to apply capital flow control measures in foreign debt management by the self-borrowing and self-payment principle in line with international practices.

By Huong Diu/ Huyen Trang