On the afternoon of October 23, Minister of Finance Ho Duc Phoc, authorized by the Prime Minister, presented a mid-term assessment report on the implementation of the National Financial Plan and borrowing and repayment of public debt for the 5-year period 2021 - 2025.
In the 3 years of 2021-2023, the Government borrowed about 1.32 million billion VND (reaching nearly 43% of the plan). Of which, borrowing from the central budget was nearly 1.28 million billion VND (reaching 44.1% of the plan). The source of loans is mainly domestic, through the issuance of long-term bonds (average 12.6-13.92 years) with preferential interest rates.
Minister Ho Duc Phoc said that the mobilization and repayment of public debt and the public debt safety indicators, loan limits, government guarantees, and local government loans ensure the set goals.
Minister of Finance Ho Duc Phoc (Photo: Quochoi.vn).
Specifically, public debt by the end of 2023 will be about VND4 million billion, equivalent to 39-40% of GDP. This level is 2.7-3.7% lower than GDP in 2021. Government debt will be about VND3.7 million billion, equivalent to 36-37% of GDP, lower than GDP in 2021 by 1.7-2.7%. By the end of 2023, domestic debt will account for 73% of outstanding government debt, up from 67% in 2021.
National foreign debt is about 3.8 million billion VND, about 37-38% of GDP. Of which, self-borrowed and self-repaid debt of enterprises and credit institutions will increase to 70.7% in 2023. Government debt and Government-guaranteed foreign debt will decrease from 38.6% in 2021 to 29.3% in 2023. The Government's direct debt repayment obligation compared to total budget revenue is about 20-21%, down 0.5-1.5% compared to 2021.
Examining this content, Chairman of the Finance and Budget Committee Le Quang Manh commented that the economic context is facing many difficulties, the growth rate of state budget revenue is slowing down, while the demand for investment spending to promote economic recovery and development is increasing quite significantly.
This year, the Government estimates that the mobilization demand will reach VND604,379 billion (equal to 93.8% of the plan). Of this, about VND589,000 billion will be borrowed to repay the principal debt of the central budget (accounting for 32.35% of the total loan structure).
According to the auditing agency, this ratio tends to increase in 2024 (about 42.4%), showing a trend of having to increase borrowing to repay principal. Moreover, new loans negotiated and signed from 2022 have higher interest rates, which is a big challenge, requiring improved efficiency in using loan capital.
Chairman of the Finance and Budget Committee Le Quang Manh (Photo: Quochoi.vn).
In 2024, the Government expects a total loan demand of VND676,057 billion, of which nearly 55.2% will be borrowed to cover the central budget deficit (VND372,900 billion). The loan to repay the principal of the central budget is VND287,034 billion and the loan for re-lending is VND16,123 billion.
The Government's plan is higher than the loan level approved by the National Assembly and the actual loan amount in 2023, which are VND55,000 billion and VND71,670 billion, respectively.
With this level of borrowing and debt repayment, the Finance and Budget Committee forecasts public debt in 2024 to be around 39-40% of GDP in the case of positive GDP growth. In addition, government debt will be 37-38% of GDP, the country's foreign debt will be 38-39% of GDP; the government's direct debt repayment obligation compared to budget revenue will be 24-25%. These targets are within the ceiling allowed by the National Assembly.
The audit agency noted that the absolute number and the ratio of loans to repay principal are on the rise. The Government's direct debt repayment obligation compared to the State budget revenue in 2024 is about 24-25%, approaching the ceiling according to the National Assembly's Resolution.
Therefore, the Finance and Budget Committee recommends that the Government carefully evaluate and analyze the causes to find solutions to manage the budget balance and ensure public debt safety.
“The Government needs to allocate increased revenue to increase principal repayment, strengthen management to improve the efficiency of loan use; strictly manage the mobilization and use of loans to offset budget deficits and repay principal. Issuing government bonds is linked to the ability to disburse and repay principal of the State budget,” the audit agency noted .
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