Vietnam PM says nation targeting 9% growth in second half

VIETNAM aims to boost economic growth to “about 9 per cent” in the second half of the year as the government will maintain its gross domestic product growth target for 2023, Prime Minister Pham Minh Chinh said, according to a post on the government’s website that cited proceedings at a cabinet meeting on Saturday (Aug 5).

The government will “prioritise economic growth by boosting the three growth drivers including investment, consumption and exports”, while aiming “to balance between interest rates and the currency’s exchange rates”, Chinh was cited as saying.

A downturn in global demand for goods, affected by high interest rates, has left trade-reliant Vietnam at risk of missing its 6.5 per cent economic growth target this year. The government is looking for ways to salvage the goal, including by pressuring the central bank to lower borrowing costs to boost credit and bolster economic activity.

Chinh told the central bank “to pursue flexible monetary policies” and “to continue lowering commercial lending interest rates, increasing money supply, lifting credit limits for banks, and delaying loan payments for borrowers”, according to the government posting. 

While State Bank of Vietnam has cut a raft of interest rates four times since the beginning of this year, monetary authorities have dragged their feet on calls to further ease policy citing concerns about bad debt that could in turn threaten financial stability.

The prime minister also ordered ministries to conduct a reasonable expansion for fiscal policy such as continuing to provide tax breaks, speed up government spending in key infrastructure projects, shorten administrative procedures and attract more foreign investment, according to the posting.

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The government is trying to revive the property market and boost domestic consumption in order to make up for the drop in exports. Vietnam’s overseas shipments fell for a fifth consecutive month in July – the longest slump in 14 years.

Headline inflation was little changed in July from a year ago at 2.06 per cent, while the core measure, which strips out food, fuel, health care and education services, gained 4.1 per cent in July, government data showed.

Separately on Sunday, Chinh ordered the government to ensure national food security under all circumstances, while boosting sustainable rice production and exports amid threats to global supply.

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Vietnam minister says increase in rice price an opportunity to boost exports

Chinh directed the agriculture and environment ministries to develop major planting areas and achieve the goal of producing more than 43 million tonnes of the grain “in years to come”, according to an Aug 5 directive that was posted on the government’s website on Sunday.

The premier instructed ministries and local governments to balance grain supplies for local use and exports to ensure food security, while lifting technical barriers to expand overseas sales. Vietnam on Tuesday said this year’s paddy production is likely to exceed 43 million tonnes, with exports of rice expected to reach 7.8 million tonnes, up from over 7.1 million tonnes in 2022.

The prime minister’s directive came after top shipper India banned some shipments of the grain and Thailand urged farmers to reduce rice planting to save water after poor rainfalls. New Delhi’s move raised concerns about the supply of food staples for billions of people globally and sent Asian benchmark rice prices to a three-year high.

Chinh said that Vietnamese traders in some areas had made massive purchases of paddies and rice, triggering a localised imbalance in supply and demand and pushing local grain prices to an unreasonable level. BLOOMBERG