Sunday , April 21 2024

Bonds, low lending interest rates key to economic recovery: experts

Government bond issuance and low bank lending interest rates will help revive the economy after the body blow it has taken from Covid-19, experts said.

Vietnam needs to allocate 5.5-5.8 percent of its GDP, or VND445.76-666 trillion (US$19.46-29.07 billion) for economic recovery, according to the National Assembly Economic Committee.

“Without a special support program and a fiscal and monetary stimulus package, Vietnam will fall behind and fail to meet its five-year economic growth targets,” Can Van Luc, chief economist at lender BIDV, said at a forum Sunday.

Truong Van Phuoc, former acting president of the National Financial Supervisory Commission, said one way to raise money is for the government to issue bonds.

The central bank should lowers its policy rates by one percentage point since inflation is forecast to be under 3 percent this year, he said. The government’s target had been to keep it under 4 percent.

The bank should also ease refinancing loan requirements to bring down banks’ interest rates, Phuoc added.

Vo Tri Thanh, former head of the Central Institute for Economic Management, said easing restrictions on deficits and public debt would also boost recovery.

Luc said that the government should cut bank lending interests by 0.5-1 percentage point next year by using various tools.

National Assembly chairman Vuong Dinh Hue said the support should focus on some key sectors with recovery prospects and ensure the country has the capability to repay debts.

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