Illustrative image (Photo: Internet) Hanoi (VNS/VNA) - As Vietnam employsunprecedented measures to recover from the economic ravages of theCOVID-19 pandemic with hastened disbursement of public investment,supervision must be enhanced to prevent profiteering, politicians have warned.
This was highlighted in the report of theNational Assembly (NA) Economic Committee sent to the NA Standing Committee toprepare for its 45th meeting that began on May 8.
The economic report revealed the total valueof support packages for production, business and social welfare wasestimated at 600 trillion VND (25.8 billion USD).
The figure included 256.6 trillion VND offiscal support from the State budget, 16.2 trillion VND in refinancing from theState Bank of Vietnam, 9.5 trillion VND from the Vietnam Social Insurance, 300trillion VND from credit institutions, 11 trillion VND from Vietnam Electricityand 15 trillion VND from telecommunications companies.
Such moves were unprecedented support in Vietnam toease the impacts of the COVID-19 pandemic and accelerate economic recovery, thecommittee said.
The fiscal support policies were issued ingood time but there could be a lag for them to take hold because it wouldtake time to issue guidelines to ensure the policies benefit the targetedgroups, the committee said.
Noting that most of the support wasin the form of cash, the committee urged supervision to be enhanced to preventprofiteering.
Regarding monetary and credit policies, thecommittee said more detailed instructions were needed to speed up loanrestructuring and reduce lending rates. Restructured loans nowaccount for just about 10 percent of the total outstanding loans affectedby the COVID-19 pandemic.
Many businesses were still facingdifficulties in accessing loans with preferential rates due to requirementsabout mortgages, proving COVID-19'’s damages to their business and their cashflow for payment, thus, the policy remained not effective as hoped.
Statistics showed that despite the launchingof the support package worth 165 trillion VND in loans with preferential rates,total outstanding loans as of April 10 posted a month-on-month decrease of 0.53percent. Only 22.4 percent of 354,286 debtors managed to access preferentialcredit packages.
Notably, the economic committee said room forfurther cuts in lending interest rates was modest and there was a risk of baddebts rising after the pandemic. “The rate cuts and loosening monetarypolicies could weigh on inflation and exchange rates in the medium term,” thereport said.
Support in capital sources, such as fromthe credit guarantee fund for small and medium-sized enterprises, would beimportant for businesses, the committee said.
Widen budget deficit if necessary
According to the committee, in any economicscenarios, achieving a growth rate of 6.8 percent would be a big challenge.
However, a recession would not be likely asthe Government’s success in controlling the spread of the virus, timely issuingof economic stimulus package together with flexible monetary policy and fiscalpolicy had helped increase the economy’s resistance against shocks.
While other investment sources slowed down,increasing disbursement of public investment which was planned at nearly 700trillion VND this year would be effective to accelerate post-pandemic economicgrowth, the committee said, adding that if necessary, the budget deficit shouldbe widened more than the planned ratio of 3.44 percent of gross domesticproduct this year.
The focus must be planned on maintaining themacro-economic stability, controlling inflation, stabilising the financial andmonetary market as well as the banking system.
Prices of products under theGovernment’s management should not be increased this year, the committeeadded./.
This was highlighted in the report of theNational Assembly (NA) Economic Committee sent to the NA Standing Committee toprepare for its 45th meeting that began on May 8.
The economic report revealed the total valueof support packages for production, business and social welfare wasestimated at 600 trillion VND (25.8 billion USD).
The figure included 256.6 trillion VND offiscal support from the State budget, 16.2 trillion VND in refinancing from theState Bank of Vietnam, 9.5 trillion VND from the Vietnam Social Insurance, 300trillion VND from credit institutions, 11 trillion VND from Vietnam Electricityand 15 trillion VND from telecommunications companies.
Such moves were unprecedented support in Vietnam toease the impacts of the COVID-19 pandemic and accelerate economic recovery, thecommittee said.
The fiscal support policies were issued ingood time but there could be a lag for them to take hold because it wouldtake time to issue guidelines to ensure the policies benefit the targetedgroups, the committee said.
Noting that most of the support wasin the form of cash, the committee urged supervision to be enhanced to preventprofiteering.
Regarding monetary and credit policies, thecommittee said more detailed instructions were needed to speed up loanrestructuring and reduce lending rates. Restructured loans nowaccount for just about 10 percent of the total outstanding loans affectedby the COVID-19 pandemic.
Many businesses were still facingdifficulties in accessing loans with preferential rates due to requirementsabout mortgages, proving COVID-19'’s damages to their business and their cashflow for payment, thus, the policy remained not effective as hoped.
Statistics showed that despite the launchingof the support package worth 165 trillion VND in loans with preferential rates,total outstanding loans as of April 10 posted a month-on-month decrease of 0.53percent. Only 22.4 percent of 354,286 debtors managed to access preferentialcredit packages.
Notably, the economic committee said room forfurther cuts in lending interest rates was modest and there was a risk of baddebts rising after the pandemic. “The rate cuts and loosening monetarypolicies could weigh on inflation and exchange rates in the medium term,” thereport said.
Support in capital sources, such as fromthe credit guarantee fund for small and medium-sized enterprises, would beimportant for businesses, the committee said.
Widen budget deficit if necessary
According to the committee, in any economicscenarios, achieving a growth rate of 6.8 percent would be a big challenge.
However, a recession would not be likely asthe Government’s success in controlling the spread of the virus, timely issuingof economic stimulus package together with flexible monetary policy and fiscalpolicy had helped increase the economy’s resistance against shocks.
While other investment sources slowed down,increasing disbursement of public investment which was planned at nearly 700trillion VND this year would be effective to accelerate post-pandemic economicgrowth, the committee said, adding that if necessary, the budget deficit shouldbe widened more than the planned ratio of 3.44 percent of gross domesticproduct this year.
The focus must be planned on maintaining themacro-economic stability, controlling inflation, stabilising the financial andmonetary market as well as the banking system.
Prices of products under theGovernment’s management should not be increased this year, the committeeadded./.
VNA
