Cancel
Economy

Vietnam to borrow additional $1.2 billion from foreign partners in 2023

Khanh Minh Friday | 12/15/2023 10:28

Photo: VnEconomy.vn

The Ministry of Finance is completing the negotiation and signing of 12 loan agreements with a total value of $1.255 billion.

As of mid-November 2023, the finance ministry had signed six foreign loan agreements totaling $531.79 million with the International Fund for Agriculture Development, Korea, and Japan on behalf of the government.

In November, the ministry also submitted a proposal for negotiations with some financial organizations, including the World Bank, the German Reconstruction Bank, the French Development Agency, and European Investment,... for projects involving transportation infrastructure development, energy, and the environment.

At the same time, the Ministry of Finance synthesizes opinions and reports on the draft mid-term assessment report of the 5-year public loan and debt repayment plan for 2021–2025.

By the end of 2022, Vietnam's main bilateral creditors, including Japan lent more than $10.6 billion (equivalent to VND252,000 billion) to the Vietnamese government; South Korea and France lent more than $1 billion, equivalent to about VND27,000 billion; Germany lent more than $500 million (over $13,000 billion).

Based on multilateral partners, the WB tops the list of creditors with nearly $15 billion (equivalent to over VND350,000 billion), followed by the Asian Development Bank with nearly $7.7 billion, equivalent to about VND180,000 billion.

Most recently, in July 2023, the government signed three loan agreements with the Japanese government with a total value of $434.45 million. With the signed loans, Japan continues to be Vietnam's largest bilateral donor, with a total committed capital to date of more than 2,567 billion yen, equivalent to more than $23 billion.

In addition, the Ministry of Finance and the Japan International Cooperation Agency also signed two loan agreements for infrastructure development investment projects in Binh Duong and Lam Dong provinces.

In particular, the loan for the public transport infrastructure improvement project in Binh Duong province, worth 6.3 billion yen, was deployed in the field of transport infrastructure development through the development of a rapid bus system connecting traffic between Binh Duong province and HCM City. Ho Chi Minh City and Dong Nai province, creating a premise to develop a directional transportation system along the metro route.

The loan for the project to improve agricultural development infrastructure in Lam Dong province, worth 4.7 billion yen, aims to support Lam Dong province's agricultural infrastructure in small sub-regions—projects in the fields of transportation, irrigation, and flower trading centers.

According to a report from the Ministry of Finance, in the period 2021–2023, debt safety targets for each year are guaranteed to be within the ceiling levels and safety thresholds approved by the National Assembly.

Specifically, it is estimated that by the end of 2023, public debt/GDP will be about 39–40%; government debt/GDP will be about 36–37%; and the country's foreign debt/GDP will be about 37–38%, far from the warning threshold.

However, the government's direct debt repayment obligation (excluding debt repayment obligations for on-lending loans)/total state budget revenue is about 20–21%; although less than 25%, the pressure to repay debt is gradually increasing.

It is expected that during this period, the government's total loan amount is about VND1,317 trillion (reaching 42.9% of the plan), of which borrowing from the central budget is about VND1,279 trillion (reaching 44.1% of the plan). The government's direct debt repayment obligation is about VND906.7 trillion (reaching 53.3% of the plan).

Latest news

    Most view