It is necessary to ensure the borrowings and repayments of public debts in 2025 is within the approved estimate. Photo: Illustrative photo.

Public debt at the end of 2025 is expected to be about 36-37% of GDP

In 2025, the world and regional situation is forecast to continue to be complicated and unpredictable; economic recovery is slow; conflicts continue to be tense, threatening the recovery of supply chains, the circulation of trade in goods and investment capital; the operating interest rates of some major economies are forecast to continue to decrease but remain high rate due to high inflationary pressure; the domestic economy continues to restore, however, external difficulties and challenges are still unpredictable.

In that context, based on the general and specific objectives in Resolution No. 23/2021/QH15 dated July 28, 2021 of the National Assembly on the National Financial Plan and Public Debt Borrowing and Repayment for the 5-year period 2021-2025 as well as the main macroeconomic indicators on the socio-economic situation, the state budget in 2024, and the Government's 2025 plan; the estimated public debt by the end of 2024 and the implementation of the Government's borrowing instruments and agreements, the Government develops a plan for public debt repayment in 2025.

By the end of 2025, public debt is forecasted at about 36-37% of GDP, Government debt at about 34-35% of GDP, and the country's foreign debt at about 33-34% of GDP; the Government's direct debt repayment obligations compared to State budget revenue will be about 24%; The country's foreign debt repayment obligation compared to the export turnover of goods and services (excluding the obligation to repay short-term principal debt under 12 months) at around 7-8%, ensuring within the ceiling and threshold approved by the National Assembly.

According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government's borrowing plan in 2024.

Of which, borrowing from the central budget to cover the budget deficit and repay principal debt is VND 804,242 billion, an increase of 21.9% compared to the estimate in 2024, the rest is foreign borrowing for re-lending. Mobilization sources flexibly combine tools including issuing government bonds, ODA loans, and foreign preferential loans. The Government also determined that, if necessary, it will mobilize funds from other legal financial sources.

Regarding the Government's debt repayment obligations, based on the current government debt portfolio and the Government's capital mobilization task in 2025, the Government's direct debt repayment obligations are expected to be about VND 468,542 billion (equivalent to about 24% of the State budget revenue). In the Government's direct debt repayment structure, domestic debt repayment is expected to account for about 87.5%, the rest is ODA and foreign preferential loan repayment. The source for interest repayment is allocated in the State budget estimate, the source for principal repayment is allocated from new loan mobilization (from domestic loan sources).

Strictly manage public debt

According to the Government, 2025 is the final year of implementing the 5-year Plan for the period 2021-2025. In the context of many difficulties and challenges in the international and domestic situation, in order to achieve the goal of strictly managing public debt and maintaining the security and safety of the national financial system, the Government continues to implement solutions to strengthen public debt management.

Accordingly, the Government fully implements solutions on public debt management as stated in the Resolutions of the National Assembly on the National Financial Plan and borrowing and repayment of public debt for the 5-year period 2021-2025, and on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program. This is to ensure that borrowing and repayment of public debt is within the budget approved by competent authorities; closely monitor debt safety indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly; monitor and update fluctuations in international and domestic financial markets, and improve analytical and forecasting capacity to serve direction and management.

Additionally, the Government continues to implement solutions to accelerate public investment disbursement such as: reviewing and removing difficulties in mechanisms and policies; competent authorities direct project owners to focus on accelerating the progress of appraisal and approval. Competent authorities direct project owners to accelerate construction progress, progress of collecting and submitting disbursement dossiers, ensuring expenditures in accordance with regulations.

The Government flexibly uses appropriate mechanisms, policies, and tools in accordance with legal regulations to ensure the completion of the goal of mobilizing sufficient domestic and foreign resources for the needs of the State budget; continue to review obstacles and overlaps in legal regulations related to finance - budget, public investment, ODA loans, foreign incentives to perfect the legal framework, create conditions for borrowing and debt repayment activities and comply with current legal regulations, and not to borrow when there are provisions inconsistent with Vietnamese law.

On the other hand, continue to increase contact and promotion with domestic and foreign investors of Government bonds, improve the effectiveness of national credit rating assessment to achieve the goal of “Investment” rating, contributing to enhancing Vietnam's position and reputation in the international arena.