An ODA-funded road in Ho Chi Minh City. Photo: Diep Duc Minh
Now that Vietnam is a middle-income country, the government has expected that pledges of official development assistance (ODA) and other soft loans of the next five years will shrink by up to 26 percent.
In a budget plan released on Thursday, the government said although its agencies and local governments need at least $39.5 billion in cheap loans for economic and social development projects by 2020, foreign sponsors will likely pledge between US$20 and $25 billion.
The amount committed for the last five-year period was $27.7 billion.
Vietnam will have to diversify its capital sources, including attracting foreign direct investment into projects such as roads and hospitals.
Annual disbursement will be $5-6 billion a year over the next five years, slightly higher than the 2011-15 average, the government said. Nearly $22 billion pledged for past projects will continued to be disbursed in 2016-20, it added.
Vietnam's public debt was equivalent to 61.3 percent of its gross domestic product at the end of last year, up 60.3 percent in 2014, according to official figures.
It is forecast to reach 62.3 percent at the end of this year, compared to the safety limit set at 65 percent.