On the afternoon of October 23, at the 6th Session of the 15th National Assembly , Minister of Finance Ho Duc Phoc presented the Mid-term Assessment Report on the implementation of the National Financial Plan and public debt borrowing and repayment for the 5-year period 2021-2025.
Active, tight and prudent public debt management
Regarding the Government 's borrowing and debt repayment situation, the Minister of Finance stated that in 2023, the National Assembly approved a total central budget loan of VND 621,015 billion and approved a loan for re-lending of ODA loans and foreign incentives of the Government of VND 23,394 billion.
To carry out the above-mentioned capital mobilization task, the Government has deployed capital mobilization from domestic loans and ODA loans, preferential loans from foreign donors. The estimated mobilization demand for the whole year of 2023 is estimated at VND 604,379 billion (equal to 93.8% of the plan), of which loans for re-lending are VND 14,626 billion (62.5% of the plan).
Total debt repayment of the Government in 2023 is estimated at VND 311,537 billion, of which direct debt repayment is estimated at VND 279,742 billion, equal to 95.3% of the estimate; repayment of foreign loans for re-lending is estimated at VND 31,795 billion, equal to 93.8% of the plan.
"The Government's debt repayment in 2023 will be fully implemented as committed, within the budget approved by competent authorities," the Minister of Finance affirmed.
Regarding the implementation of the local government borrowing and debt repayment plan, the total borrowing in the year is about 15,920 billion VND (a decrease of 11,278 billion VND compared to the National Assembly approved borrowing level of 27,198 billion VND). The total principal repayment in the year is about 2,648 billion VND (a decrease of 156 billion VND compared to the National Assembly's estimate of 2,804 billion VND).
With the above figures on borrowing and repaying local budget debt in 2023, the estimated local budget deficit in 2023 is about VND 13,272 billion, a decrease of VND 11,728 billion compared to the estimate decided by the National Assembly.
Reviewing the 3-year implementation of the 5-year public debt borrowing and repayment plan for the 2021-2023 period, in the context of countries increasing their borrowing to supplement resources to cope with the Covid-19 pandemic and recover the economy, Vietnam's public debt management is still being managed proactively, closely and cautiously. Public debt safety is ensured within the ceiling target and warning threshold approved by the National Assembly.
Need to pay attention to the trend of increasing borrowing to repay principal
Presenting the audit report, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh stated that in the context of many economic difficulties, the Government has implemented the 2023 borrowing and debt repayment plan with positive results.
However, the Government Report also shows some issues that need attention in 2023, such as the expected borrowing to repay the central budget principal accounts for a high proportion (32.35%) in the total expected borrowing structure of VND 589 trillion. This proportion tends to increase in the expected 2024 (about 42.4%), showing a trend of having to increase borrowing to repay the principal.
The average interest rate on government bonds has increased compared to 2022. New loans negotiated and signed since 2022 now have higher interest rates, which is a big challenge, requiring improved efficiency in using loan capital.
In the preliminary assessment of the 3-year implementation of the public borrowing and debt repayment plan, the Finance and Budget Committee found that the Government has made many efforts in directing and operating the management of public borrowing and debt repayment.
The Government report frankly assessed the limitations and deeply analyzed the causes of this problem. In particular, besides the objective causes, the main causes are subjective causes such as the detailed allocation of capital plans for projects of ministries, branches and localities is still slow, not close, and not adjusted promptly.
Based on the review opinions, the Finance and Budget Committee proposed that at the session, National Assembly deputies focus on assessing the public debt situation in 2023 in terms of both achievements and shortcomings and limitations; expected public debt borrowing and repayment in 2024 as well as a preliminary assessment after 3 years of implementing the public debt borrowing and repayment plan and solutions to strengthen public debt management to ensure efficiency and savings.
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