This exceeds the borrowing limits approved by the National Assembly and the actual borrowing figures for 2023, which stood at VND55 trillion and VND71.67 trillion, respectively.
According to a recently submitted Government report to the National Assembly's Standing Committee on the state of public debt in 2023 and the borrowing and repayment plan for 2024, the Government is suggesting borrowing more than VND676 trillion to address budget deficits, service principal debt, and allocate funds for on-lending. This exceeds the borrowing limits approved by the National Assembly and the actual borrowing amounts in 2023, which were VND55 trillion and VND71.67 trillion, respectively.
The primary sources of funding for the above-mentioned borrowing are mainly through bond issuance, Official Development Assistance (ODA), and foreign concessional loans. The government also emphasizes that, if necessary, they will mobilize funds from other legal financial sources.
Considering the projected borrowing and debt repayments, it is estimated that the public debt in 2024 will be in the range of 39-40 percent of GDP, government debt at 37-38 percent of GDP, and the nation's external debt at 38-39 percent of GDP. The Government's direct debt repayment obligations are expected to be approximately 24-25 percent of the total budget revenue, ensuring compliance with the limit established by the National Assembly.
Accordingly, direct debt payments for the following year will be approximately VND395.9 trillion, an increase of more than VND84.3 trillion compared to 2023. Of this amount, nearly 73 percent will go towards repaying the principal debt, with the remainder covering interest payments.
The Government is set to allocate around VND58.3 trillion for the repayment of loans acquired for on-lending, with over 96 percent of this sum dedicated to principal repayment. This debt repayment level will ensure that the direct debt servicing obligations remain below the 25 percent limit endorsed by the National Assembly.
In 2024, the Government will not entertain new guarantees for programs or projects seeking domestic or foreign loans. The existing guarantees for domestic business loans amount to around VND9.1 trillion while the guarantees for foreign loans total over VND88.4 trillion.
Based on the Government's estimates, local budgets for 2024 are projected to incur expenditures of VND26.5 trillion. Localities will seek borrowing of approximately VND30.6 trillion, primarily sourced from on-lending of ODA, government-concessional loans, and other domestic channels. The total debt repayment for localities exceeds VND4.1 trillion, and the year-end outstanding debt is 23 times the repayment amount, totaling over VND96 trillion.
Concerning foreign debt through self-borrowing and self-repayment, the Government has indicated that the projected net disbursement of medium and long-term loans is expected to be approximately $7.5-8.5 billion, and the short-term foreign debt is expected to grow by around 15-18 percent compared to the end of 2023.
In 2023, the Government ensured that the public debt safety thresholds, as determined by the National Assembly, were ensured. Specifically, expenditures amounted to approximately 4 percent of GDP, public debt stood at about 39-40 percent of GDP, Government debt was in the range of 36-37 percent of GDP, and the nation's foreign debt accounted for 37-38 percent of GDP. The Government's direct debt servicing obligations constituted around 20-21 percent of the total budget revenue, while the foreign debt repayment of the country was approximately 7-8 percent of the total merchandise and service export turnover, remaining within the limit of 25 percent approved by the National Assembly.
