The goal was highlighted in the public debt strategy by 2030.
Under the strategy, public debt would not exceed 60 percent, government debt 50 percent and foreign debt 45 percent of GDP, and the amount for debt repayment would not exceed 25 percent of the total budget revenue.
The strategy targeted that GDP would expand at an average of seven percent per year with GDP per capita reaching 7,500 USD by 2030 and a budget deficit at around three percent of GDP.
The structure of public debt had been adjusted in a more sustainable direction with the percentage of external debts falling from 61 percent of the Government’s total debt in 2011 to 33 percent in 2021.
According to Carolyn Turk, World Bank Country Director for Vietnam, Vietnam’s public debt strategy for 2030 was very important because it related to both fiscal policies as well as public debt management. The strategy also guided the Government’s borrowing activities after Vietnam become a middle-income country with the goal of becoming a high-income country by the end of 2045, which would require a huge investment in infrastructure to maintain economic growth of an average of 5-6 percent per year in the next 20 years.
She said that attention should be paid to improving the efficiency of local government debt management, pointing out that Vietnam had not yet developed a medium-term local government debt management strategy and had not assessed risks before borrowing.
Truong Hung Long, Director of the Ministry of Finance's Department for Debt Management and External Finance, said that Vietnam had graduated from IDA, the World Bank’s concessional finance window, meaning that the country no longer had access to high-preferential capitals as before and Vietnam would have to rely more on market tools to raise capital.
Therefore, it is important to have prudent and flexible medium and long-term borrowing and debt payment strategies to limit negative long-term consequences, Long said, adding that shocks like the COVID-19 pandemic always required reserve finance in the short and medium terms.
According to the strategy, the focus would be on enhancing and strengthening the management of finance, budget and public debt, improving the efficiency of loan use, ensuring debt repayment capacity and restructuring debt portfolio as well as enhancing digital transformation in public debt management./.
Source: vietnamplus