According to the government's report on the public debt situation in 2024, it is projected that by the end of this year, the country's foreign debt will be around 32-33% of GDP, much lower than the 50% ceiling targeted in Resolution 23 of the National Assembly .

ODA loans and preferential loans from foreign donors amount to approximately VND 31,280 billion, of which loans for on-lending are estimated at VND 10,745 billion. The foreign loans currently being disbursed are mainly those previously signed by the Government with long maturities and low interest rates (the weighted average interest rate of the current foreign loan portfolio is approximately 1.9% per year).

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It is projected that by the end of 2024, the country's foreign debt will be approximately 32-33% of GDP. Photo: Hoang Ha

In the first nine months of the year, the Government signed ODA loans and preferential foreign loans totaling US$638.8 million. It is expected that in 2024, negotiations and signing of 14 agreements and arrangements for ODA loans and preferential foreign loans totaling US$1,500 million will be completed.

However, the cost of borrowing from foreign sources is higher than the average cost of borrowing domestically. Interest rates from the two largest multilateral institutions (WB and ADB) range from 5.91-6.5% per year.

The disbursement rate for foreign-funded projects in the first nine months is estimated to have reached only 24.33% of the plan assigned by the Prime Minister . The subjective reasons include the ongoing development of the legal system, unresolved issues related to public investment and bidding, and pressure from donors to adopt international standards.

It is projected that by the end of 2025, public debt will continue to be around 36-37% of GDP, similar to 2024; government debt will be 34-35% of GDP (compared to 33-34% of GDP in 2024); and the country's foreign debt will be approximately 33-34% of GDP (compared to 32-33% in 2024).