Vietnam’s public debt management on right track: Ministry

Illustrative image (Source: VNA)

Vietnam’s public debt accounted for 37.4% of the country’s gross domestic product (GDP) as of the end of 2022, while national external debt stood at about 36.1% of GDP, according to data released by the Ministry of Finance (MoF).

According to the ministry’s Bulletin No.16 on Public Debt of Vietnam for the 2018-2022 period, to date, all targets set by the National Assembly in public debt repayment for the 2021-2025 period have been completed.

In the 2021-2023 period, the Government's total borrowing reached 42.9% of the plan. The Government's direct debt repayment obligation was equivalent to 53.3% of the plan, while withdrawal of Government loans for re-lending has been within the limit.

The average issuance term of government bonds in 2021, 2022, and 2023 ensured the target of 9 - 11 years set by the National Assembly. The growth rate of government guaranteed outstanding debt in a year did not to exceed the growth rate of nominal GDP in the previous year, according to the bulletin.

Meanwhile, the total borrowing level of the local budget reached 26.3% of the plan approved by the National Assembly. The debt repayment obligation of local administrations reached 41.1% of the plan approved by the National Assembly. Debt safety targets for each year in the 2021-2023 period have been kept within the approved ceiling levels and safety thresholds.

Truong Hung Long, Director General of the MoF’s Debt Management and External Finance Department said that in the 2021-2023 period, Vietnam has shown strong performance in public debt management, while making full and on-time debt payments, contributing to improving the national credit rating.

He noted that in 2022 when many countries saw their credit ratings downgraded, both Moody’s and S&P, the two international credit rating agencies, upgraded Vietnam’s ratings, while Fitch maintained its ratings.

Speaking at a recent conference, Andrea Coppola, the WB’s Lead Country Economist, lauded Vietnam’s reforms in public debt management in terms of legal framework and institutional management.

He advised Vietnam to reform institutions to facilitate public debt mobilisation, thus supporting the development of the domestic capital market and contributing to effective budget management./.