The Vietnamese Government is scheduled to fulfill its debt obligation of around VND1,200 trillion (US$52.5 billion) during the 2022-2024 period, including VND1,045 trillion ($45.7 billion) of direct loans and VND146 trillion ($6.4 billion) from repayments of on-lent loans for provinces/cities.

Vietnam's debt indicators remain under control for the 2021-2025 period.

The figures were revealed in the Ministry of Finance (MoF)’s public management plan for the 2022-24 period.

In 2022, the Government plans to borrow VND673.5 trillion ($29.4 billion), of which VND450 trillion ($19.7 billion) would be used to cover the budget deficit and VND196 trillion ($8.6 billion) to pay principals.

The amount of ODA and preferential loans from international organizations is estimated at VND26.7 trillion ($1.16 billion).

For this year, the Government would allocate VND335.8 trillion ($14.7 billion) for debt payment, including VND196 trillion of borrowed principals and VND103.7 trillion of interests.

It is estimated that by late 2022, Vietnam’s public debt would be around 45-46% of the GDP, Government debt of 41-42% of the GDP, and foreign debts of 40-41%.

The ratio of debt payment to state budget revenue is expected to be in the range of 22-23%, below the 25% limit set by the National Assembly, noted the MoF.

“All debt indicators are within the threshold set by the National Assembly,” added the ministry.

The MoF, however, noted in case the state budget revenue does not reach the target and unfavorable environment of the capital market, the Government may consider raising the interest rates or turn to loans with a maturity period of fewer than five years to meet the national financial objectives for the 2021-25 period.

“This would result in higher debt payment obligation of the Government,” it suggested.

In addition, given the ongoing supporting policies of waiving and freezing payments of taxes and fees, the MoF noted the proportion of debt payments would soon approach the 25% threshold of the budget revenue.

As the National Assembly has approved a maximum rise of VND240 trillion ($10.5 billion) in the budget deficit in 2022-23 to implement the socio-economic recovery program, the MoF predicts the public debt by 2024 would be around 46-47% of the GDP, Government debt of 44-45%, and proportion of direct debit payment obligation to state budget revenue of 24-25%.

“While there may be a period that the rate of debt payment obligation surpasses the 25% threshold, the Government would strive to keep the average rate for the 2021-2025 period within the limit,” the MoF said.