Vietnam has made substantial progress in managing public debt thanks to effective reforms implemented since the adoption of the 2017 Law on Public Debt Management and other internal regulations.

Transaction at a Vietcombank branch in Hanoi. Photo: Pham Hung/The Hanoi Times

At a recent meeting with Deputy Finance Minister Tran Quoc Phuong, World Bank experts praised Vietnam for its strengths in this area, including precisely defined mandates, specific borrowing objectives, and legal frameworks tailored to different debt management activities.

The ministry said the specialists attributed Vietnam’s progress to strong coordination among relevant agencies, competent staff, a well-developed debt management strategy, and the regular publication of basic public debt data.

They also recognized the country’s strides in aligning debt management with fiscal and monetary policy, streamlining domestic and external borrowing procedures, and enhancing forecasting and cash management.

However, the experts recommended that Vietnam take further steps to improve transparency. Specifically, they suggested submitting regular public debt reports to the National Assembly, integrating risk indicators into annual borrowing plans, and conducting performance audits and debt sustainability analyses.

They also said that Vietnam should diversify its funding sources and strengthen the capacity and operations of its debt management agency.

According to Deputy Minister Phuong, public debt management is an essential component of Vietnam’s socioeconomic development.

In order to meet growth targets, the country needs to boost capital mobilization both at home and abroad while ensuring that resources are used efficiently and sustainably.

"As Vietnam continues to grow, concessional financing will no longer be available, making capital mobilization more difficult. That’s why the World Bank’s assessments and recommendations are highly valuable to us,” he said.

The deputy minister expected the World Bank to continue offering technical and strategic advice, furthering its cooperation with the ministry’s agencies, particularly the Department of Debt Management and External Finance, to strengthen public debt oversight.

The Debt Management Performance Assessment (DeMPA) is a diagnostic tool consisting of 15 indicators that cover key debt management functions, including governance, coordination with fiscal and monetary policy, borrowing and related financing activities, cash flow forecasting, surplus cash management, operational risk management, and debt recording.

Performance indicators are graded from A to D: A indicates good international practice; B, performance between basic and advanced levels; C, minimum requirements met; and D, minimum requirements not met.

The first DeMPA for Vietnam was conducted in 2011 and is now considered outdated. A new assessment is needed to evaluate the implementation of the 2017 law, measure progress, and identify areas for improvement.

Since 2024, a World Bank team has been collaborating with the Ministry of Finance and related agencies to update the DeMPA for Vietnam.