Vietnam Govt Plans US$17 Bln Fiscal Spending to Stimulate Demand
The government of Vietnam has just unveiled plans of fiscal spending of up to VND300 trillion (US$17 billion) in efforts to stimulate investments and demand of the entire economy.
The government did not specify from which sources the US$17 billion stimulus package will be, however.
“Our [Vietnam] top tasks are to use all forces to prevent economic recession,” Prime Minister Nguyen Tan Dung told a regular meeting held in Ho Chi Minh City Dec 25 and 26.
Planning and Investment Minister Vo Hong Phuc was quoted as noting that the government will use the US$1 billion stimulus package to create soft loans for local businesses particularly small and medium ones right from Jan of 2009.
Finance Minister Vu Van Ninh said apart from the US$1 billion cash package, the government will create policy incentives worth up to VND100 trillion to boost investments and production.
The government has okayed to allow the State Bank of Vietnam, the country’s central bank, to let the dong dip 3 per cent against the U.S. dollar from Dec 25 in government efforts to stabilize the forex market and give supportive hands to exporters, which shipped US$63 billion, up nearly 30 per cent this year.
Early this week [Dec 22], the SBV lowered benchmark interest rate to 8.5 per cent from 10 per cent, twice so far this month, in order to guide local banks and credit institutions to cut down borrowing costs.
Petroleum companies were allowed to cut 8.33 per cent of retail diesel prices to VND11,000/liter from Dec 24 to help push down production costs.
Vietnam’s GDP growth rate was easing at 6.23 per cent, below the 6.7 per cent target for this year with inflation down to 19.89 per cent. (Investment)
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