Vietnam to repay $12 billion in national debts in 2016

By Vinh An   June 7, 2016 | 07:18 pm GMT+7

Vietnam will set aside VND273.3 trillion ($12 billion) to pay off maturing bonds and loans this year, according to the Prime Minister on Tuesday, of which VND95 trillion ($4 billion) will be used to roll over principal loans to stay afloat.

This year, the Vietnamese government plans to borrow an additional VND452 trillion ($20 billion) to offset the state budget and raise funds for government spending.

Vietnam will raise the funds from various sources including government bonds and loans in official development assistance. Vietnam might also offer $758 million of government-guaranteed bonds on the foreign market.

According to the Ministry of Planning and Investment, the government has approved an investment plan for development projects, which accounts for 17 percent of state budget spending, down from 30 percent.

Vietnam’s budget deficit has extended to $3 billion so far this year. The 2016 budget deficit is forecast to increase to 6.5 percent of gross domestic product.

After Vietnam's transition to a lower middle income status, the concession level for loans in official development assistance has remarkably decreased.

The World Bank announced earlier this year it would stop offering preferential loans to Vietnam from July 2017.