Vietnam Prime Minister Pham Minh Chinh stated that the country would adhere to its aim to maintain macroeconomic stability and contain inflation. However, the economy is currently facing new challenges.
The COVID-19 pandemic has helped the Southeast Asian economy recover, but it has recently faced several difficulties, including declining global demand and a rising dollar.
This year, the central bank increased its policy rates by 200 basis points while allowing the dong to depreciate versus the dollar.
Over the previous three months, the dong currency has lost 6% versus the dollar, while Vietnam’s stock market (VNI) has dropped by more than 20%.
The macroeconomy is becoming harder to manage, according to PM Pham Minh Chinh. So we must be on the lookout for threats, but we won’t panic.
Vietnam’s gross domestic product is predicted to increase by 8% this year, faster than the 2.58% growth seen in 2017. This year, the nation wants to keep inflation at a 4% maximum.
According to PM Pham Minh Chinh, the country would “pursue an active, prudent, flexible and sturdy monetary policy in harmony coordination with fiscal policy and other policies, without abrupt changes.” He also noted that the real estate market is experiencing liquidity issues.
“The bond and stock markets now bear risks after a period of strong growth, with businesses having a high demand for capital for production while banks’ credit is tight,” PM Pham Minh Chinh told the legislature.
With commercial banks under pressure from tightening loan conditions and rising interest rates, the central bank of Vietnam conducted impromptu meetings with them this week to discuss liquidity in the system.
PM Pham Minh Chinh said that the government would ensure that the financial and real estate sectors work better and are more open.
“The government will propose amendments to securities and enterprise laws and related regulations,” PM Pham Minh Chinh added.
He added that hundreds of gas stations have had to close or reduce sales in response to a fuel shortage in recent weeks, claiming financial hardships and limited domestic supplies.
PM Pham Minh Chinh declared that Vietnam would consider increasing its national fuel production and storage capacity to prevent future gasoline shortages.
Photo Credit: Viet Nam Government Portal