Vietnam aims to ensure macroeconomic stability and stands ready to address inflation risks for high economic growth, according to a prime ministerial directive issued recently.

Production at Garment 40 company in Thanh Xuan District, Hanoi. Photo: Hai Linh

Under Directive No.15, giving measures to promote economic development in a volatile world in the remainder of the year, the Government’s priority is to ensure financial resilience against global uncertainties and timely address any risks to the economy.

This year, Vietnam set the inflation growth target below 4%, while the consumer price index (CPI), the main gauge of inflation, expanded by 2.58% year-on-year during the eight months.

The directive also noted the necessity to maintain careful and flexible monetary policy management, focusing on tightening control of prices of strategic commodities, especially petroleum and gas products, to support supply and demand.

To ensure an independent and self-reliant economy with high economic growth, the prime minister assigned the Ministry of Planning and Investment to closely follow the global economic situation to timely adjust the Government’s policies and minimize potential impacts on the economy.

The Ministry of Finance is tasked with expanding the fiscal policy at a moderate pace with close association with monetary policy.

Chinh also asked the finance ministry to propose more measures to stabilize market prices of commodities; reduce costs for businesses and people, and strengthen supervision activities on the stock and corporate bond markets to address any violations of existing regulations.

The State Bank of Vietnam should monitor the foreign exchange market and credit growth to contain inflation and support growth.

“Commercial banks are expected to cut lending rates to share the burden of economic difficulties with the people and businesses, and channel credit into priority fields, rather than those with high risks,” stated the directive.

The Ministry of Industry and Trade is responsible for keeping sufficient supplies of essential commodities, including petrol products, and utilizing the petrol price stabilization funds to minimize impacts on economic activities.

Vietnam posted economic growth of 6.4% in the first half of 2022, higher than the 2.04% rate in the same period of 2020 and 5.74% in the first six months of last year. The Government anticipated the GDP growth to hit over 7% in the third quarter, helping the economic growth to exceed the 6-6.5% target for this year.