Vietnam approves US$15.3 billion stimulus package

The 347 trillion dong (US$15.3 billion) stimulus package has been significantly reduced over worries that it would lead to inflation. Last November, the government had considered 800 trillion dong (US$35.2 billion) in stimulus measures.

The government is seeking “sustainable” growth that ensures macroeconomic stability while controlling inflation, said Vuong Dinh Hue, chairman of the National Assembly, according to a posting on the government’s website.

Vietnamese authorities are seeking to revive an economy ravaged by tough anti-pandemic lockdowns, which have led to factory closures that have crippled global supply chains.

About 170 trillion dong (US$7.5 billion) from the stimulus package will be spent on infrastructure for 2022-23. The package also includes measures to reduce bank loan interest rates by about one percentage point and delay loan payments to help businesses.

READ: Vietnam scales down fiscal stimulus package

The central bank will intervene in the money market by selling dollars to stabilise foreign exchange rates when needed. In addition, parliament also approved an increase in the state budget deficit by a total of 240 trillion dong (US$10.6 billion) for 2022 and 2023, according to Bloomberg.