WB Official: Vietnam Should Boost Fiscal Policy Next Year
Martin Rama, chief economist of the World Bank has advised the government of Vietnam to boost the size of the fiscal policy and make it public soon combined with lessening monetary policy as part efforts to stabilize the macro situation next year.
The government has been right in adopting monetary policies over the past months by providing more credits to companies to overcome the bad effects of the global economic downturn, Martin Rama said.
The World Bank official called the government’s first stimulus package via interest rate subsidy “a unique move” as it helped pushed down borrowing costs for local companies from 21% per annum.
Now the situation has changed, and the government should end the first stimulus package otherwise it will push up interest rates. By doing so, the government will issue bonds more easily to raise funds for stimulus packages, he advised.
The state budget deficit will remain unchanged next year compared with this year, the World Bank official recommended. (Banking Times)
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