Vietnam to borrow additional $1.2bln from foreign sources

According to the Ministry of Finance, it is completing negotiations on borrowing some $1.255 billion more at preferential interest rates from external sources before year’s-end.

As of mid-November, the ministry had signed, on behalf of the government, six loan agreements with the International Fund for Agricultural Development (IFAD), South Korea, and Japan, totaling $531.79 million.

In November, the ministry also submitted a proposal on negotiations with the World Bank (WB), the Credit Institute for Reconstruction from Germany, or Kreditanstalt für Wiederaufbau (KFW), the Agence Française de Développement (AFD), and the European Investment Bank (EIB), among others, on more loans for transport infrastructure, energy, and environmental projects.

According to the ministry’s mid-term assessment of plans for borrowing and debt payment in the 2021-2025 period, as of the end of 2022, the government had borrowed more than $12 billion from bilateral lenders such as Japan, South Korea, France, and Germany.

In regard to Vietnam’s multilateral lenders, the WB tops the list with nearly $15 billion in loans, followed by the Asian Development Bank (ADB) with nearly $7.7 billion.

All external debts as a percentage of GDP remain under safe limits. Estimated public debt currently accounts for 30-40 per cent of GDP, government debt 36-37 per cent, and external debt 37-38 per cent.