Vietnam May Require ODA-funded Projects to Research Impact on Public Debt

The Vietnamese Ministry of Finance (MOF) is drafting a circular on guiding implementation of projects using official development assistance (ODA) which will require these projects to have public debt impact assessment. The agency seeking to borrow the loan will have to provide detailed plan on the use of the fund to the Finance Ministry for assessment. Under the proposed rule, the MoF will work with the Ministry of Planning and Investment (MPI) on impact of the loan on the public debt situation and submit to the prime minister for final approval before the government comes through to take the loan. All satisfied ODA loans must not impact the medium- and long-term public debt. Vietnam had brought down the public debt to below 61% of the gross domestic product (GDP) through the end of 2018, of which the government’s debt was lowered to less than 52% of GDP and the country’s foreign debt was about 49.7% of GDP, according to the latest report by the Finance Ministry. (Dau Tu - Investment)