State Treasury flexible in managing volume of government bond issuance in 2023

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The Ministry of Finance has assigned the State Treasury to issue VND 400,000 billion of Government bonds in 2023. Photo: Thuy Linh.

The total loan demand of the central budget in 2023 is VND 621,015 billion, according to the estimate approved by the National Assembly in Resolution No. 69/2022/QH15 dated 11/11/2022 (including VND 430,500 billion to offset the central budget deficit and VND 190,515 billion to pay the due principal).

Based on domestic and foreign capital mobilization sources, the Ministry of Finance has assigned the State Treasury to issue VND 400,000 billion of Government bonds in 2023, equal to the issuing government bonds issuance plan in 2022 and nearly 1.9 times higher than the adjusted Government bond issuance plan in 2022.

According to the State Treasury, the mobilization of Government bond capital in 2023 is expected to face many difficulties and challenges as the world situation in 2023 continues to be complicated and unpredictable. The country's economy has opportunities, advantages and difficulties, and challenges. The pressure of inflation, exchange rate, and interest rate increase; Vietnam's traditional and large import and export markets have been narrowed; the scale of the economy is modest, but the openness, competitiveness and resistance to external shocks are still limited; unexpected factors still have potential risks that are difficult to predict, etc.

According to the forecast, Vietnam's economy in 2023 will continue to be a bright spot with a growth rate of 6.2% or 6.7% in the context of quite a gloom in other economies. Therefore, the Government's commitment to maintaining macroeconomic stability and the development prospects of Vietnam's economy in 2023 will be an important foundation and facilitate the issuance of government bonds by the State Treasury.

In that context, the State Treasury will closely monitor market developments, central budget collection, plan to repay due principal and the ability to disburse public investment capital to manage the volume of government bond issuance in line with the capital needs of the central budget, including the capital demand for the implementation of the socio-economic recovery and development program. In addition, the State Treasury will continue to issue government bonds by bidding through the Stock Exchange to ensure publicity and transparency.

The State Treasury will also flexibly issue various Government bond terms to harmonize debt repayment obligations between years, ensure the objectives of portfolio restructuring, and reduce the risk of short-term refinancing of the central budget; strive for the average government bond term in 2023 in line with the goals set out in Resolution No. 23/2021/QH15 and Resolution No. 43/2022/QH15.

Along with that, the State Treasury will control the government bond interest rate following the market situation and capital needs of the central budget as well as the monetary policy management of the State Bank.

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The State Treasury will also continue to closely link government bond capital mobilization with state budget fund management and treasury management to reduce loan costs and risks, increase efficiency, safety and sustainability of the public financial management system and improve fiscal space.