Vietnam approves $15.3 billion in aid to economy hit by coronavirus pandemic

The government said it seeks “sustainable” growth to ensure macroeconomic stability while keeping inflation under control.

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Vietnam’s parliament approved a stimulus package worth about VND347 trillion ($15.3 billion) to revive the economy battered by Covid-19 and severe lockdowns, with a focus on helping virus-hit businesses, workers and boosting infrastructure expenditure.

The National Assembly voted to approve a plan that was sharply scaled back amid fears it would spur inflation.

According to a post on the government’s website, National Assembly President Vuong Dinh Hue told a forum in Hanoi last month that the government seeks “sustainable” growth, ensuring macroeconomic stability while controlling inflation. Policy makers are weighing Rp 800 trillion in stimulus in November.

Vietnamese officials are seeking to repair an economy ravaged by a draconian anti-virus lockdown that has shuttered factories and crippled global supply chains.

The stimulus package includes about Rp 170 trillion in infrastructure spending in 2022-23.

It also took steps to reduce bank lending rates by about 1 percentage point and delay loan payments to help businesses. The central bank will intervene in the currency market by selling dollars to stabilize foreign exchange rates when needed.

The parliament also approved an increase of Rp 240 trillion in the state budget deficit for 2022 and 2023.