PM Nguyen Tan Dung chairs the monthly Government meeting for May

(VOVworld) - Increasing the economy’s total demand to boost the market is one of the requirements the Prime Minister set at Sunday’s monthly Government meeting. According to PM Nguyen Tan Dung, the stimulation must not cause inflation for next year but must ensure an appropriate growth. VOV editor Hong Van summarizes the issue.

PM Dung said raising the economy’s total demand is not a new Government stimulation package, but is simply meant to fulfill targets set at the beginning of this year without reviving inflation. Relevant agencies should arrange credits for the agricultural sector, exporters, and those employing large numbers of laborers. Prime Minister Dung says ‘Over the past 5 months, there has been a shortage of affordable credit but the Government plans to increase credit loans by as much as 17%. The plan will also help to maintain national economic growth at a proper level. The offered credits should target areas extremely in need of capital such as the agricultural and rural sector, efficient exporters who are encountering temporary financial difficulties, and some real estate companies that are involved in building houses for low income people’.  

At the Government monthly meeting for May, some ministers noted the opportunities of businesses to access credit capital. Increased costs of electricity, petrol, and raw materials are creating pressures on production, trade, and competitiveness of export items. Minister of Construction Trinh Dinh Dung says ‘Real estate is almost a locomotive of the building material production and construction industries. So it’s necessary to iron out snags for real estate companies, which should not be considered non-production enterprises. Real estate includes production and non-production structures but the production part accounts for a majority. If lending for the sector is continued, the real estate will revive and bad debts will decrease. It’s necessary to slacken the time to pay value-added tax for real estate companies regardless of project scales’.

To meet Government requirements, the State Bank of Vietnam will continue cutting deposit and lending interest rates in line with the decline of inflation and force commercial banks to drop their lending interest rates. Nguyen Dong Tien, Deputy Governor of the State Bank of Vietnam, says ‘Interest rates will continue to be cut in pursuance of the country’s goal to control inflation but solutions should be considered so that inflation will not return while supporting enterprises. The State Bank of Vietnam has instructed credit organizations to deal with bad debts, re-structure debts, and concentrate capital for prioritized areas’.

Cabinet members all agreed on speeding up the disbursement of capital sources from the state budget and Government bonds to create a breakthrough for the national economy.