Vietnam PM says government targeting 9% growth in second half

HANOI (Bloomberg): Vietnam aims to boost economic growth to "about 9%” in the second half of the year as the government will maintain its gross domestic product growth target for 2023, Prime Minister Pham Minh Chinh said, according to a post on the government’s website that cited proceedings at a cabinet meeting on Saturday.

The government will "prioritize economic growth by boosting the three growth drivers including investment, consumption and exports,” while aiming "to balance between interest rates and the currency’s exchange rates,” Chinh was cited as saying.

A downturn in global demand for goods, affected by high interest rates, has left trade-reliant Vietnam at risk of missing its 6.5% economic growth target this year.

The government is looking for ways to salvage the goal, including by pressuring the central bank to lower borrowing costs to boost credit and bolster economic activity.

Chinh told the central bank "to pursue flexible monetary policies” and "to continue lowering commercial lending interest rates, increasing money supply, lifting credit limits for banks, and delaying loan payments for borrowers,” according to the government posting.

While State Bank of Vietnam has cut a raft of interest rates four times since the beginning of this year, monetary authorities have dragged their feet on calls to further ease policy citing concerns about bad debt that could in turn threaten financial stability.

Expansion

The prime minister also ordered ministries to conduct a reasonable expansion for fiscal policy such as continuing to provide tax breaks, speed up government spending in key infrastructure projects, shorten administrative procedures and attract more foreign investment, according to the posting.

The government is trying to revive the property market and boost domestic consumption in order to make up for the drop in exports. Vietnam’s overseas shipments fell for a fifth consecutive month in July - the longest slump in 14 years.

Headline inflation was little changed in July from a year ago at 2.06%, while the core measure, which strips out food, fuel, health care and education services, gained 4.1% in July, government data showed. - Bloomberg