Government debt to rise by 20% this year

Around 92% of it would come from bonds, the government said in a report to the National Assembly Tuesday.

In the first nine months it borrowed nearly $185 million from overseas with an interest rate of 0.1% and a 40-year tenor, and plans to borrow another $188 million in the last quarter.

It will pay VND324.58 trillion to service existing debts this year.

It said public debt is under control and within the cap approved by the National Assembly.

After Vietnam became a middle-income country recently foreign loans are closer to market rates, the report said.

Coupon rate on government bonds have increased by 2.79-3.27 percentage points a year since the beginning of this year due to unfavorable conditions in the international capital market.

The depreciation of the Vietnamese dong also increases pressure on debt servicing, especially when denominated in dollars.

Next year the government plans to borrow VND644.52 trillion, a 4% increase from this year.