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Global financial crisis is not serious enough to destabilize the macro economy
This was the conclusion made by Prime Minister Nguyen Tan Dung at a cabinet meeting with relevant ministries and agencies to assess the impacts of the current financial crisis and map out urgent tasks that need to be implemented in the near future.
On October 21, the Government Office released a report on the PM’s conclusion on the above mentioned issue. The report runs as follows:
On October 17, at the Government Office, the PM met with relevant ministries and agencies to assess the impact of the current financial crisis and devise solutions to minimize possible negative impacts on the Vietnamese economy.
The meeting included representatives from the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Investment and Planning, the Ministry of Agriculture and Rural Development, the Ministry of Information and Communications, the State Bank of Vietnam, the National Committee for Financial Supervision and economic experts from relevant sectors.
After hearing opinions from relevant ministries and sectors, economic experts and the Deputy Prime Minister, the Government PM concluded:
The global credit and financial crisis is spreading and includes abnormal fluctuations not as predicted initially. Many countries in the world have to cooperate in coping with this. Even so, for the Vietnamese economy so far, the impact of the global financial crisis is not serious enough to destabilize the macro economy and its major balances. However, it is essential to anticipate possible negative impacts on the Vietnamese economy, particularly when the signs of slowdown in the developed economies have started to appear.
Such impacts can be psychological, in terms of information forecasting and economic management, the securities market, exchange rates and the banking system’s security. In addition, financial funds and the trade balance may be affected by reduced exports and other income sources amid a high trade deficit. As a corollary, the development of production activities will possibly be slowed, affecting budget collection and economic growth.
Judging from the situation, the government’s top priority will still be controlling inflation through adopting major solutions such as tightening the monetary policy while flexibly boosting production and exports, reducing the trade deficit, gradually shifting to the market economy and averting economic downturns in the near future.
It is imperative to actively limit the negative impact of the financial crisis which leads to economic depression and to grasp opportunities to stabilize the macro-economy to ensure social security and maintain sustainable growth.
To implement the policy, the Government urged ministries, departments and agencies to actively control, evaluate, analyse and prepare comprehensive plans and measures for the following issues:
The Ministry of Information and Telecommunications will work with relevant ministries and departments to update information in each specific economic sector and better carry out promulgation activities to provide transparent information.
The State Bank of Vietnam (SBV), the Ministry of Finance (MoF) and the Ministry of Industry and Trade (MoIT) will work with relevant agencies to prepare the following plans to report to Prime Minister in November.
The SBV will devise measures to ensure the safe operation of the banking system, control interest rates and exchange rates flexibly and provide enough capital for production, trading and export.
The MoF will develop plans to ensure the safe operation of financial investment funds, the securities and bond markets and the flexible use of tax measures.
The MoIT will prepare measures to accelerate exports, contain the trade deficit, ensure agricultural product consumption (especially rice) balance necessary commodities for production and gradually shift trading of these products to market economy.
The Government asked the SBV to quickly implement the Prime Minister’s directions on monetary policy management and to follow money market fluctuations to take control of the situation and report to the Prime Minister in order to ensure safety and promote sustainable development.
The MoF will report their budget estimate for 2009 to the Government before October 25 to submit the National Assembly.
The Ministry of Planning and Investment will report to the Prime Minister in early November on measures to speed up the disbursement of construction capital, FDI, ODA, especially capital from Government bond issues for key investment projects in infrastructure, transport, electric generation, shipbuilding, export, irrigation and agriculture.
VOV
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