Public debt well below cap

By Vien Thong   January 1, 2024 | 12:29 am PT
Public debt well below cap
Ministry of Finance headquarters in Hanoi. Photo by VnExpress/Giang Huy
Vietnam recorded a public debt of VND3.8 quadrillion ($156.57 billion), or 37% of GDP, way below the National Assembly’s 60% cap.

Government debt was at 34% of GDP, below the 50% cap, which the government considers positive, with an increase in domestic debt ratio (to 71%) and a decline in foreign debt ratio, according to a report by the Ministry of Finance.

Domestic debts are mostly through government bonds with a maturity period of 12.4 years, which carry lower risks than foreign debts, which depend on currency exchange rates.

Foreign debts mostly consist of long-term loans with incentive interest rates.

The low debt ratio allows Vietnam to borrow for large projects to create sustainable development. Finance Minister Ho Duc Phoc said Vietnam’s finances were managed efficiently last year, with an overspending ratio of 4%, below the 4.42% target.

State revenue was estimated to be 5% more than earlier speculations. Public spending was 1.5 times that of 2022 at VND760 trillion.

Around VND200 trillion was spent on tax and fee incentives.

The Ministry of Finance has prioritized macroeconomic stability and inflation control for next year, and will continue to focus on managing fiscal policy proactively.

It aims to improve the tax collection system in a way that brings convenience to taxpayers and ensure efficient tax collection on digital platforms.

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