Prime Minister Nguyen Xuan Phuc speaks at the meeting of the National Advisory Council on Financial and Monetary Policies on July 9 (Photo: VNA)Hanoi (VNA) - Fiscal and monetary tools and policies should be governed in amore proactive and flexible manner from now to year’s end in order to maintainmacro-economic stability and boost growth, according to the National AdvisoryCouncil on Financial and Monetary Policies.
Addressing the council’s meeting on July 9,Prime Minister Nguyen Xuan Phuc, who is also its chair, said COVID-19 continuesto ravage many countries that are major partners of Vietnam.
The International Monetary Fund has predicted thatASEAN’s economy will contract by 2 percent this year and the global economy by4.9 percent, leading to an easing of fiscal and monetary policies in manycountries. Economic stimulus packages around the world have totalled some 11trillion USD and are likely to continue to grow. Budget overspending limitshave also been raised in many countries.
In that context, he noted, thanks to appropriateand timely moves, Vietnam has brought COVID-19 under control early and gonethree months without any community transmission of the coronavirus.
Though economic growth of 1.81 percent in thefirst half of 2020 was a ten-year low, it was still high compared to regionalcountries, showing that Vietnam has so far managed to control the pandemic,prevent significant disruptions to its economy, and ensure social security.
Pointing out that there remain latent risks for theeconomy, the PM emphasised that macro-economic stability remains an importanttarget, adding that this year’s CPI must be kept below 4 percent, any untappedroom in fiscal and monetary policies capitalised upon to fuel growth, andpublic investment disbursement accelerated.
Amid shrunken international markets and domesticdemand, it is necessary to introduce solutions to stimulate exports and localconsumption, he said.
He shared a view held by other council members thatVietnam has substantial opportunities for development thanks to its earlycontainment of the pandemic and its macro-stability, and it should bedetermined to develop its economy, attract more investment, and make better useof socio-economic development opportunities, in addition to maintaining diseaseprevention and control. The strength of a population nearing 100 million alsoneeds to be optimised.
The council said a key prerequisite is toprevent a second wave of COVID-19 from wreaking havoc. Fiscal and monetarytools and policies also need to be governed more proactively and flexibly,demand stimulated to boost growth, difficulties facing production and dailyactivities removed, and macro-stability sustained.
It suggested the Government allow credit growthof more than 10 percent this year and raise budget overspending and public debtby some 3 to 4 percent of GDP to secure more resources to support small andmedium-sized enterprises (SMEs) as well as major enterprises, while preventingdisruptions to key sectors.
It is also necessary to give renewed considerationto cutting bank interest rates to assist businesses and individuals and to reduceregular spending, taxes, and fees to save funds for urgent tasks, the counciladded.
PM Phuc also emphasised the necessity of stronginstitutional reform and the perfecting of policies to create a competitivebusiness climate to attract more private and foreign investment./.
VNA
