HANOI (Reuters) – Vietnam will stick with its goal to maintain inflation below management and guarantee macroeconomic stability, Prime Minister Pham Minh Chinh mentioned on Saturday, because the economic system faces contemporary challenges.
The Southeast Asian economic system has rebounded from the COVID-19 pandemic, however has not too long ago confronted quite a few challenges, with weakening international demand and a strengthening U.S. greenback.
The central financial institution has this 12 months raised its coverage charges by a mixed 200 foundation factors and allowed the dong forex to weaken towards greenback.
Vietnam’s inventory market has fallen by greater than 20% whereas the dong forex has misplaced 6% towards greenback over the previous three months.
“It’s getting tougher to handle the macro economic system,” Chinh mentioned. “We have to keep vigilant (towards dangers) however we gained’t get panic.”
Vietnam’s gross home product is anticipated to develop 8% this 12 months, quicker than an enlargement of two.58% final 12 months. The nation targets to cap inflation at 4% this 12 months.
Chinh mentioned the nation will proceed to “pursue an energetic, prudent, versatile and durable financial coverage in concord coordination with fiscal coverage and different insurance policies, with out abrupt modifications”.
“The bond and inventory markets now bear dangers after a interval of robust development, with companies having excessive demand for capital for manufacturing whereas banks’ credit score is tight,” Chinh advised parliament, including that the actual property market is going through liquidity issues.
Vietnam’s central financial institution held emergency conferences this week with industrial banks to debate liquidity within the system, as lenders face strain from tightening credit score situations and better rates of interest.
Chinh mentioned the federal government will take measures to make sure that the monetary and actual property markets function in a extra clear and efficient method.
“The federal government will suggest amendments to securities and enterprise legal guidelines and associated rules,” Chinh mentioned.
Chinh mentioned the authorities have been sluggish in responding to a gas provide crunch that has left a whole bunch of petrol stations having shut or restricted gross sales in current weeks, citing monetary difficulties and tight home provides.
He mentioned Vietnam will contemplate elevating the nationwide gas storage capability and home gas manufacturing to keep away from future gas shortages.
Reporting by Khanh Vu; Modifying by William Mallard and Michael Perry
