The government of Vietnam has just received approval from the Politburo, the most powerful body, for its plans to slash GDP growth to 5 per cent this year, extend low-cost loans by two years as part of efforts to ward off economic slowdown.
“Banks will be allowed to provide medium-and long-term low-cost loans to companies and individuals instead short-term loans now,” the government said in a statement.
The government has not specified how much this move will cost, but it said earlier that its total stimulus spending could reach US$6 billion.
This is part of a number of added measures by the government to maintain economic growth amid the global downturn, the government said.
In the week ended April 3, local banks had added VND24.409 trillion of soft loans, up 13.09 per cent from a week earlier, raising the total sum of subsidized loans to VND202.131 trillion (approx US$12 billion), the State Bank of Vietnam, the country’s central bank said on its website.
Of that sum, state-owned commercial banks and credit funds loaned VND151 trillion, up 13.02 per cent from a week ago, commercial joint stock banks lent VND42.141 trillion, up 13.08 per cent, joint stock and foreign banks VND8.633 trillion, up 14.2 per cent, finance firms VND347 billion, up 17.22 per cent, the SBV added.
Under the government’s US$1 billion subsidized loans program launched in early February, banks in Vietnam will pump up to VND620 trillion into the economy by end-2009, the state media said earlier.
This year, the state budget deficit is allowed to be capped at 8 per cent of the country’s GDP value, the government said. (chinhphu.vn, Labor)
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