Vietnam scales down fiscal stimulus package

Even though the package has been significantly reduced from the 800 trillion dong (US$35.2 billion) the government was considering last November, it will nevertheless still seek to help businesses, workers and increase infrastructure spending affected by the pandemic.

About 176 trillion dong (US$7.7 billion) has been budgeted for infrastructure projects for 2022-23, planning and investment minister Nguyen Chi Dung told the National Assembly.

In addition, the stimulus package includes measures to reduce bank loan interest rates by about 1 percentage point and delay loan payments to help businesses, according to a plan submitted to legislators.

About 110 trillion dong (US$4.8 billion) will go towards helping enterprises, household businesses and cooperatives, while 53.15 trillion dong (US$2.4 billion) will support workers as well as the continuation of tax breaks, tax reductions and tax exemptions for businesses.

The government will be holding a special session in Hanoi to consider the stimulus measures. It is proposing to increase the state budget deficit by 240 trillion dong (US$10.5 billion) for the 2022-23 period, said Nguyen.

The authorities are seeking to mend an economy battered by strict lockdowns, which have led to factory closures that have crippled global supply chains.

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Economic growth is expected to accelerate in 2022, with momentum coming from the travel and tourism industries, increasing domestic consumption and government stimulus measures, Le Trung Hieu, head of the GDP department of the General Statistics Office, said late last month, according to The Business Times.