Public debt safety indicators are strictly controlled

VCN – The safety indicators strictly will be strictly controlled within the limits approved by the National Assembly, ensuring national financial security, strengthening fiscal policy sustainability, and creating reserves to respond to macro risks.
The strength of the economy and fiscal policy help Vietnam to rise in credit rating The strength of the economy and fiscal policy help Vietnam to rise in credit rating
It is necessary to develop an independent and professional public debt management agency It is necessary to develop an independent and professional public debt management agency
Ensuring safe and sustainable public debt control Ensuring safe and sustainable public debt control
Public debt safety indicators are strictly controlled

Illustrative photo: Source: Internet

Keeping public debt safety indicators under control

The Government's report on the public debt in 2022 and 2023 shows that the debt target by the end of 2022 is expected to be within the ceiling limit and safety warning threshold approved by the National Assembly.

The Government's total mobilised capital in 2022 reached about 619,492 billion. The mobilised capital is aimed at meeting the needs of the State budget. Therefore, if the State revenue reaches positive results, the disbursement of public investment capital from the central budget is slow, the mobilised capital will be revised, leading to a decrease in public debt safety indicators.

From the early year to the current date, the Government's capital is mainly mobilised from domestic loans of VND569,976 (accounting for 92%), issuance of Government bonds, withdrawal of official development assistance (ODA) and preferential loans of VND 49,515 billion, including the central budget of 30,070 billion and the on-lending of about VND19,446 billion.

Regarding foreign capital mobilisation, in the first nine months of 2022, the Government negotiated and signed two agreements on ODA loans and foreign concessional loans worth about US$184.6 million. By the end of 2022, the Government expects to negotiate and sign six agreements on ODA and preferential loans with a total value of about US$188 million.

The total debt repayment of the Government in 2022 is estimated at VND324,583 billion, including VND294,300 billion of direct debt repayment, accounting for 98% of the estimate, and VND30.283 of on-lending. The total debt repayment of domestic loans accounts for over 82% of the total debt repayment of the central budget.

The Government's direct debt repayment target in 2022 is about 18-19% compared with the State revenue, within the 25% of the ceiling limit approved by the National Assembly. The Government-guaranteed borrowing and debt repayment are within the approved limit.

According to the Government's report, the public debt safety indicators will be strictly controlled within the limit approved by the National Assembly, ensuring national financial security and, strengthening the sustainability of fiscal policy, creating capital reserves to respond to macro risks.

The government debt structure will be maintained under the 5-year public debt repayment and borrowing plan for the 2021-2025 period and the orientation of the Public Debt Strategy to 2030.

The domestic debt increased, accounting for 70% of the Government's debt. However, the external debt is still mainly from ODA loans, long-term preferential loans, contributing to reducing exchange rate risks and ensuring national financial security. In addition, government-guaranteed debt plunged from 8.8% of GDP in 2015 to about 3.2% in 2022.

Mobilising capital with low cost and reasonable risk

In 2022, the management and use of public debt is performed more effectively. The public debt strategy to 2030, approved by the Prime Minister, is an important basis for reforming public debt management sustainably and effectively. A series of capital mobilisation measures have been implemented with a low cost associated with a reasonable level of risk; the structure and volume of loans are adjusted following the demand for capital use and market conditions.

In addition, the domestic government bond market is to be promoted by diversifying products and expanding the long-term investor base. Focusing on building a system of public debt management tools, strengthening inspection and supervision of the on-lending, not granting government guarantees for new loans, promoting and supporting disbursement, and ensuring timely repayment.

According to the report, the Government requests to strictly implement thrift and anti-waste in using loans and public debt. As a result, the capital mobilisation to meet the public expenditure target has achieved positive results, followed with the actual needs, and minimised risks. As a result, the domestic government bond mobilisation, terms and interest rates have been more favourable than in the previous period.

Low-cost resources are used flexibly, the investor base is diversified to reduce dependence on commercial banks. However, the projects on mobilising capital from ODA and foreign preferential loans must be carefully controlled and completed investment procedures for signing to protect national interests.

In 2022, Vietnam effectively implemented the national credit rating, which is shown by organisations' improvement of Vietnam's national credit rating.

On May 26, S&P Global organisation raised the country's credit rating from BB to BB+ with a stable outlook. On September 6, Moody's increased the rating from Ba3 to Ba2, with a stable outlook.

The effective and sustainable control of public debt while operating a flexible fiscal policy to support economic recovery and development is appreciated by rating agencies, which is one of the key factors for a rating upgrade.

Vietnam's credit rating upgrade in the context of global fluctuations and challenges has a very positive meaning, contributing to improving the country's reputation and creating spillover effects for the economy, reducing the Government's borrowing costs, businesses and credit institutions, attracting more capital sources from potential investors, contributing to socio-economic development.

By Hoai Anh/Ngoc Loan

Related News

Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.
Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT)  investment: Fully calculating to avoid loss of state assets

Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT) investment: Fully calculating to avoid loss of state assets

VCN - In the project "1 law amending 4 laws" related to investment, on investment under the public-private partnership (PPP) method, the majority of National Assembly deputies agreed with the Government's proposal to allow an increase in the state capital ratio for some specific cases.
Ensuring national public debt safety in 2024

Ensuring national public debt safety in 2024

VCN - Since the beginning of the year, public debt management has been conducted proactively and effectively, meeting the need of raising capital for development investment. At the same time, debt indicators by the end of 2024 are guaranteed within the ceiling and safety threshold approved by the National Assembly, ensuring national financial security, increasing proactive response to risks arising from external and internal causes of the economy.

Latest News

Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.

More News

Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Exchange rate fluctuations bring huge profits to many banks

Exchange rate fluctuations bring huge profits to many banks

Net profits from the foreign exchange trading segment of many banks have gained positive results thanks to a strong USD/VNĐ exchange rate fluctuations this year.
A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Many challenges in restructuring public finance

Many challenges in restructuring public finance

VCN - Restructuring public finance is an important step to improve state financial management, ensure resources are allocated reasonably and effectively, contributing to the country's sustainable development. In addition to the achieved results, the process of accelerating public finance restructuring also faces many pressures.
Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

VCN - E-commerce platforms that declare and pay taxes on behalf of traders not only help to reduce the number of tax declaration points but also reduce the cost of compliance with administrative procedures for the whole society because only one point as the e-commerce trading platform implements tax deduction, payment and declaration on behalf of tens, hundreds of thousands of individuals and business households on the platform.
Disbursement of public investment must be accelerated: Deputy PM

Disbursement of public investment must be accelerated: Deputy PM

Deputy Prime Minister Ho Duc Phoc has called on ministries, agencies, and localities to accelerate the disbursement of public investment from now until the year-end and further tighten investment management.
HCMC: Domestic revenue rises, revenue from import-export activities begins to increase

HCMC: Domestic revenue rises, revenue from import-export activities begins to increase

VCN - The results of State budget revenue in HCMC in the first 10 months of 2024 are estimated to increase by 10% over the same period last year, of which the highlight is that revenue from import-export activities has begun to increase.
Effectively control fiscal and monetary policy : Deputy Prime Minister and Minister Ho Duc Phoc

Effectively control fiscal and monetary policy : Deputy Prime Minister and Minister Ho Duc Phoc

VCN - Monetary policy and fiscal policy are the driving force for economic development, so that there has been effective coordination, Deputy Prime Minister and Minister of Finance Ho Duc Phoc.
Read More

Your care

Latest Most read
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN - According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government'
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
Mobile Version