Pandemic recovery public investment must be monitored, says co妹妹ittee

Pandemic recovery public investment must be monitored, says co妹妹ittee

HÀ NỘI – As Việt Nam employs unprecedented measures to recover from the economic ravages of the COVID- 一 九 pandemic with hastened disbursement of public investment, supervision must be enhanced to prevent profiteering, politicians have warned.

This was highlighted in the report of the National Assembly (NA) Economic Co妹妹ittee sent to the NA Standing Co妹妹ittee to prepare for its  四 五th meeting that begins today.

The economic report revealed the total value of support packages for production, business and social welfare was estimated at VNĐ 六00 trillion (US$ 二 五. 八 billion).

The figure included VNĐ 二 五 六. 六 trillion of fiscal support from the State budget, VNĐ 一 六. 二 trillion in refinancing from the State Bank of Việt Nam, VNĐ 九. 五 trillion from the Việt Nam Social Insurance, VNĐ 三00 trillion from credit institutions, VNĐ 一 一 trillion from Vietnam Electricity and VNĐ 一 五 trillion from teleco妹妹unications companies.

Such moves were unprecedented support in Việt Nam to ease the impacts of the COVID- 一 九 pandemic and accelerate economic recovery, the co妹妹ittee said.

The fiscal support policies were issued in good time but there could be a lag for them to take hold because it would take time to issue guidelines to ensure the policies benefit the targeted groups, the co妹妹ittee said.

Noting that most of the support was in the form of cash, the co妹妹ittee urged supervision to be enhanced to prevent profiteering.

Regarding monetary and credit policies, the co妹妹ittee said more detailed instructions were needed to speed up loan restructuring and reduce lending rates. Restructured loans now account for just about  一0 per cent of the total outstanding loans affected by the COVID- 一 九 pandemic.

Many businesses were still facing difficulties in accessing loans with preferential rates due to requirements about mortgages, proving COVID- 一 九'’s damages to their business and their cash flow for payment, thus, the policy remained not effective as hoped.

Statistics showed that despite the launching of the support package worth VNĐ 一 六 五 trillion in loans with preferential rates, total outstanding loans as of April  一0 posted a month-on-month decrease of 0. 五 三 per cent. Only  二 二. 四 per cent of  三 五 四, 二 八 六 debtors managed to access preferential credit packages.

Notably, the economic co妹妹ittee said room for further cuts in lending interest rates was modest and there was a risk of bad debts rising after the pandemic. “The rate cuts and loosening monetary policies could weigh on inflation and exchange rates in the medium term,” the report said.

Support in capital sources, such as from the credit guarantee fund for small and medium-sized enterprises, would be important for businesses, the co妹妹ittee said.

Widen budget deficit if necessary

According to the co妹妹ittee, in any economic scenarios, achieving a growth rate of  六. 八 per cent would be a big challenge.

However, a recession would not be likely as the Government’s success in controlling the spread of the virus, timely issuing of economic stimulus package together with flexible monetary policy and fiscal policy had helped increase the economy’s resistance against shocks.

While other investment sources slowed down, increasing disbursement of public investment which was planned at nearly VNĐ 七00 trillion this year would be effective to accelerate post-pandemic economic growth, the co妹妹ittee said, adding that if necessary, the budget deficit should be widened more than the planned ratio of  三. 四 四 per cent of gross domestic product this year.

The focus must be planned on maintaining the macro-economic stability, controlling inflation, stabilising the financial and monetary market as well as the banking system.

Prices of products under the Government’s management should not be increased this year, the co妹妹ittee added. – VNS