The Vietnamese government plans to borrow around VND1,700 trillion (US$75 billion) during the 2021-2023 period.

The government would borrow VND624.22 trillion (US$27.2 billion) in 2021. Photo: Cong Hung

The move was revealed in Prime Minister Pham Minh Chinh’s plan on public debt management for the three-year period and debt payment schedule in 2021.

Under the plan, the Ministry of Finance (MoF) is responsible for restructuring the current debt portfolio and expanding the government bond market.

“Government agencies are tasked with allocating sufficient funds for government’s debt payment, and avoiding overdue debt that could affect Vietnam’s international commitments,” said Chinh.

The PM also requests to tighten the process of issuing new government guarantee for enterprises seeking domestic and foreign loans, while the growth rate of new loans under government guarantee should not exceed the country’s economic expansion rate in the previous year.

Local provinces/cities are responsible for keeping their respective provincial budget deficit at 0.2% of the GDP and paying the debt amount of VND18.4 trillion (US$801.46 million).

Regarding businesses and credit institutions looking to apply for commercial loans from abroad, the plan set the growth rate of outstanding loans of around 18-20% per year, and the annual net loan to stay below US$7 billion to keep the government’s foreign debt under control.

In 2021, the government would borrow VND624.22 trillion (US$27.2 billion), including VND527.35 trillion (US$23 billion) from the domestic source, and localities to borrow VND28.8 trillion (US$1.25 billion).

The government this year expects to earmark VND394.5 trillion (US$17.18 billion) to pay off debt, including VND366.2 trillion (US$16 billion) of the national debt, while such figure at the provincial level is estimated at VND6.66 trillion (US$290 million).

Fitch Solutions in a note predicted Vietnam’s strong economic performance in this year would help keep the public-debt-to GDP ratio to 55.8%, well below the government’s statutory limit of 65%, and lower than the estimated 57% in 2020.