Counter-cyclical Hanoi financial strategy likely to continue in 2024

FILE PHOTO: A Vietnamese flag flies atop the State Bank building in central Hanoi

HANOI: Vietnam in 2024 should continue to pursue a counter-cyclical financial policy, with a focus on increasing spending and maximising tax and fee exemption reduction, to support economic growth, experts say. In 2023, although there were many difficulties in promoting economic growth, the positive effects of financial and monetary policies were shown.

Specifically, the proactive and flexible monetary policy managed by the State Bank of Vietnam (SBV) contributed to controlling inflation, stabilising the macroeconomy and supporting the economy to grow by 5.05%, among the highest in the region and the world.

The financial policy, including supporting packages for reducing and exempting taxes and fees of several goods and services, were quite effective, contributing to supporting the business community to overcome difficulties, recover and develop production and business.

To Hoai Nam, vice-chairman of the Vietnam Association of Small and Medium-sized Enterprises, said supporting packages to reduce value added tax, special consumption tax, and environmental protection tax on petrol had a direct effect in helping recover production and business activities of many enterprises last year.

The total value of financial support packages last year was nearly 200 trillion dong.

The policies, which were issued and implemented promptly, were highly appreciated by the business community as they created great support resources for them, Nam said.

The tax and fee reduction policies last year had an immediate effect as it was quickly put into practice and brought direct benefits to enterprises, said financial expert Vo Tri Thanh .

According to Thanh, although the disbursement of some supporting packages, such as the 2% interest rate preferential package worth 40 trillion dong from the state budget, was not high, they basically had a positive effect in some industries.

The coordination between the financial and monetary policies last year helped improve financial market liquidity, reduce pressure on interest rates and foreign exchange rates. — Viet Nam News/ANN