Vietnam Raises Debt Ceilings, Lifts Deficit Cap in Ambitious Growth Strategy

Vietnam has significantly amended its national financial strategy through 2030, expanding its fiscal parameters to accommodate a target of double-digit economic growth while aiming to secure long-term stability.

Deputy Prime Minister Nguyen Van Thang signed Decision No. 1119/QD-TTg on June 23, which revises several key provisions of the original strategy enacted by Decision No. 368/QD-TTg on March 21, 2022.

The updated framework sets more ambitious fiscal targets for the 2026-2030 period. The state budget revenue mobilisation target has been increased to 18% of GDP, up from a previous range of 16-17%. Correspondingly, the targeted share of domestic revenue within that total has been lifted from 86-87% to 87-88%.

Key fiscal ceilings have also been raised to provide greater policy space. The budget deficit limit has been increased from approximately 3% to 5% of GDP through 2030, while the national external debt ceiling has been lifted from 45% to 50% of GDP. The expenditure structure has been adjusted to allocate around 40% of total state budget spending towards development investment.

These adjustments are designed to support an average annual GDP growth rate of at least 10% between 2026 and 2030. Decision 1119 outlines a broad series of policy measures focused on institutional reform, removing impediments to unlock productive capacity, and enhancing the investment climate.

The government will continue to refine its legal and institutional frameworks to support a new growth model, accelerate economic restructuring, and establish science, technology, innovation, and digital transformation as the economy's primary growth engines. Efforts will be intensified to remove regulatory obstacles, advance administrative reform, digitise public services, and improve data sharing among government agencies. The decision also calls for better management of surplus state-owned land and property to reduce waste.

Under the strategy, the state sector is tasked with maintaining macroeconomic stability and providing strategic direction for the economy. Simultaneously, the government will foster the private sector's development by improving access to financial resources and credit, in line with resolutions from the Politburo, National Assembly, and the government.

Foreign direct investment (FDI) policy will be reformed, shifting focus from tax-based incentives to alternative mechanisms, including performance-based and post-investment support. The government also plans to introduce competitive policy frameworks to mobilise resources for emerging economic models and strategic projects. Priority areas include growth poles, key economic regions, special economic zones, international financial centres, the national data centre, high-speed rail, nuclear power, and renewable energy projects like solar and offshore wind.

The decision explicitly calls for an “appropriately expansionary fiscal policy” to support growth, alongside the development of a modern and transparent tax system. State budget management will be tightened through strict expenditure savings, with resources prioritised for development investment in key growth drivers.

Public debt management will be strengthened through the effective implementation of existing laws, enhanced risk management, and greater transparency, with the goal of achieving an investment-grade sovereign credit rating as soon as possible. The government will also implement measures to regulate production, stabilise supply and demand, and manage prices for essential goods, while promoting exports, particularly to nations with which Vietnam has recently upgraded its strategic partnerships.

The strategy sets clear long-term goals. By 2028, Vietnam aims for its investment environment to rank among the top three in ASEAN and the top 30 globally. By 2030, the country targets having 50 companies listed among Southeast Asia’s 500 largest enterprises and one to three corporations included in the world’s top 500.