News Room - Business/Economics

Posted on 17 Sep 2009

Economic stimulus package rescues 91pct of ailing companies

Before the affects of the global financial crisis and economic downturn were felt in Vietnam, the government in the end of last year the government switched to the goal of curbing inflation to prevent the economic slump by launching an economic stimulus package of nearly 150 trillion dong. The package included 17 trillion dong for subsidising bank loan rates, 3.4 trillion dong for temporarily withdrawing the advanced investment and construction capital, 37.2 trillion dong of the state budget's advanced capital for urgent projects, 30.2 trillion dong of investment source being transferred from 2008 to 2009, 20 trillion dong of G-bonds, 28 trillion dong of tax reduction, and 17 trillion dong of loans for the lawful companies.

 

After seven months, according to State Bank of Vietnam (SBV), the socio-economic situation showed positive movements. Q1 economic growth was posted at 3.1 percent, Q2 at 4.5 percent while the macro economy continued being controlled with an inflation of 3.22 percent, trade deficit of $3.4 billion equalling to 10.5 percent of the Jan-July export turnover, actualised FDI of $4.6 billion and ODA disbursement of $1.4 billion. In this period, the domestic retail sales turnover surged 18.3 percent year-on-year, monetary market and real estate market both recovered impressively.

 

Noticeably, the 4 percent pa lending rate subsidisation package worth total 17 trillion dong was conducted from February 2009. Till now, the financial package is regarded as the lifebuoy for many ailing enterprises and important motive for the country to overcome the economic storm. Particularly, the credit growth in Feb-Sep stood at 22.61 percent, helping curb the economic downturn.

 

Among over 403 trillion dong of soft loans, 67 percent of these were provided to private companies, 17.4 percent to individual production households and 15.6 percent to state firms.