Vietnam PM says it will continue to aim to contain inflation and ensure macro stability

HANOI: Vietnam will stick to its goals of curbing inflation and ensuring macroeconomic stability, Prime Minister Pham Minh Chinh said Saturday as the economy faces new challenges.

Southeast Asian economies have recovered from the COVID-19 pandemic, but have recently faced a number of challenges due to weakening global demand and a stronger US dollar.

The central bank has raised its policy rate by a combined 200 basis points this year, allowing the dong currency to depreciate against the dollar.

Vietnam’s stock market has fallen more than 20% and the dong currency has fallen 6% against the dollar over the past three months.

“It’s getting harder and harder to manage the macro economy,” Chin said. “We need to remain vigilant (against the risks), but we won’t panic.”

Vietnam’s gross domestic product is expected to grow 8% this year, faster than last year’s 2.58% expansion. The country is targeting inflation at her 4% this year.

The country will continue to “pursue an aggressive, prudent, flexible and prudent monetary policy consistent with fiscal and other policies without abrupt changes,” Chin said.

Chin said in parliament that the real estate market was facing liquidity problems, saying: “The bond and stock markets have seen bank credit tight while businesses have high capital needs for production. So we are now taking risks after a period of strong growth.”

The central bank of Vietnam held an emergency meeting with commercial banks this week to discuss liquidity in the system. Lenders face pressure from tightening credit terms and rising interest rates.

Chin said the government will take steps to ensure that the financial and property markets operate in a more transparent and effective manner.

“The government will propose amendments to the Securities Law and the Enterprise Law, as well as related regulations,” Chin said.

Chin said authorities have been slow to respond to a fuel supply crisis that has closed or restricted sales at hundreds of petrol stations in recent weeks, citing financial difficulties and tight domestic supplies.

He said Vietnam would consider increasing the country’s fuel storage capacity and domestic fuel production to avoid future fuel shortages.