Vietnam gov’t rules out economic stimulus package for now

The Vietnamese government is not considering an economic stimulus package or monetary easing at the moment, according to Prime Minister Nguyen Xuan Phuc.

Prime Minister Nguyen Xuan Phuc at the meeting. Source: VGP.

Macroeconomic stabilization remains a key target of the government, PM Phuc said at a monthly government meeting on March 3.

He requested related government agencies to closely monitor the Covid-19 epidemic and draw up plans accordingly.

The PM expected no hike of electricity prices at the moment and more efforts are needed to prevent smuggling, trade fraud and market manipulation.

According to Phuc, government agencies must ensure immediate effects of supporting measures for citizens and enterprises hurt by the Covid-19 epidemic, avoid any delay or lack of transparency during the process.

Such supportive measures, including preferential loans and fiscal incentives, must reach the right targets and help boost economic growth, and which are not a way of covering weaknesses or losses, Phuc stressed.

The priority at the present should be given to those operating in the fields of tourism, aviation, trade, and services, which are among the hardest hit economic groups by Covid-19, Phuc added.

Despite initial successes in containing the epidemic, Phuc urged agencies should stay cautious as the deadly virus is still spreading worldwide.

Phuc assigned the State Bank of Vietnam (SBV), the country’s central bank, to continue stabilizing interest rates and exchange rates, ensure the liquidity of the banking system, and provide sufficient capital for production.

Additionally, the Ministry of Finance is tasked with proposing measures to waive or delay payment of taxes or administrative costs for enterprises and citizens, including the payment of corporate income taxes, land rental fees and social insurance fees.

Phuc urged government agencies to speed up disbursement of public investment funds. Meeting the target of disbursing VND600 trillion (US$25.95 billion) of public investment funds in 2020 would contribute greatly to economic growth.

Meanwhile, Vietnam would continue to promote social investment, which accounted for 34% of the GDP last year, Phuc stated.

Phuc stressed local authorities must create the most favorable conditions for businesses, while reviewing existing legal frameworks to remove any obsolete regulations.

The Ministry of Agriculture and Rural Development is responsible for submitting to the government a plan to boost agricultural exports and reduce production costs in the sector.

The Ministry of Labor, Invalids and Social Affairs is tasked to assess the labor market to address the temporary shortage of workforce during the epidemic, Phuc said.

Vietnam continues to suspend issuing work permit for foreign workers coming from coronavirus-hit regions, Phuc added.