About US$1 bln spent on repaying foreign debt each year
About US$1 billion from the State budget is spent for foreign loan and interest repayments every year, an official of the Ministry of Finance said on October 25.
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After Vietnam became a lower-middle-income country in 2010, preferential loans from development partners have reduced considerably.
Before 2010, the average repayment period was about 30 years to 40 years with borrowing costs between 0.7% and 0.8% per year, including a grace period. From 2011-2015, the repayment period averaged 10 – 25 years with borrowing costs from 2%.
Hai said ODA loans have significantly contributed to socio-economic development. However, the public has raised concerns about the use of the loans.
ODA loans must be used more carefully, he added.
The Government has issued a directive on using foreign loans more effectively.
It states that public debt must be used for only development investment and building important socio-economic facilities. The Government will also increase re-payments of foreign loans from localities and cut down free provision of the funds.
