Vietnam approves second stimulus

November 1, 2009

The government has decided to continue smaller stimulus measures next year to ensure stable economic growth, an official said.

After considering the possible impact of further fiscal stimuli on the economy, the government agreed to launch another package next year, Nguyen Xuan Phuc, chief of the Government Office, told a press conference in Hanoi on Friday.

The measures, including interest rate subsidies, are expected to help businesses maintain production, Vietnam Economic Times cited Phuc as saying.

He said the government had yet decide how much money would be spent on the second package, but he was sure it would be less than the first package.

Vietnam put in place a fiscal stimulus package that it valued at more than US$8 billion early this year in a bid to boost economic growth.

Measures included tax exemptions, reductions and deferments for businesses, and an interest rate subsidy program, under which eligible businesses received 4 percent subsidies on short-term loans.

Phuc said the government would only offer 2 percentage point subsidies on short-term loans for the first quarter of next year. Meanwhile, it would provide interest rate subsidies of 2 percentage points on medium- and long- term loans through the end of 2010.

Vietnam’s GDP growth this year is projected to hit a decade-low of 5.2 percent, in line with a target of around 5 percent set by legislators, Prime Minister Nguyen Tan Dung said in October. For 2010, the government is targeting higher growth of about 6.5 percent with seven percent inflation, a per capita income of about US$1,200, and fewer than 10 percent of households categorized as poor, he said.

Source: Thanh Nien, Agencies

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