Vietnam PM says he will continue aiming to control inflation and ensure macro stability. From Health & Fitness Journal

©Health & Fitness Journal. FILE PHOTO: Southeast Asian Games – Closing Ceremony – Hanoi Indoor Games Gymnasium, Hanoi, Vietnam – May 23, 2022 Vietnam’s Prime Minister Pham Minh Chinh speaks during the closing ceremony REUTERS/Chalinee Thirasupa

By Khanh Vu

HANOI (Health & Fitness Journal) – Vietnam will stick to its goal of keeping inflation under control and ensuring macroeconomic stability, Prime Minister Pham Minh Chinh said on Saturday as the economy faces new challenges.

The Southeast Asian economy has recovered from the COVID-19 pandemic but has faced numerous challenges of late, with weaker global demand and a stronger US dollar.

The central bank has hiked interest rates by a total of 200 basis points this year and allowed the dong currency to weaken against the dollar.

Vietnam’s stock market has fallen more than 20%, while the dong currency has lost 6% against the dollar over the past three months.

“It’s getting harder and harder to manage the macro economy,” Chinh said. “We must remain vigilant (against risks), but we will not panic.”

Vietnam’s gross domestic product is expected to grow 8% this year, faster than a 2.58% expansion last year. The country aims to limit inflation to 4% this year.

Chinh said the country will continue “to pursue an active, prudent, flexible and robust monetary policy in harmony with fiscal and other policies without abrupt changes.”

“Bond and stock markets are now at risk after a period of strong growth as companies have high capital requirements for production while banks have tight credit ratings,” Chinh told parliament, adding that the real estate market is facing liquidity problems be.

Vietnam’s central bank held emergency meetings with commercial banks this week to discuss liquidity in the system as lenders come under pressure from tightening credit conditions and higher interest rates.

Chinh said the government will take steps to ensure financial and real estate markets function more transparently and effectively.

“The government will propose changes to securities and corporate laws and related regulations,” Chinh said.

Chinh said authorities have been slow to respond to a fuel supply crisis that has caused hundreds of gas stations to suspend or limit sales in recent weeks, citing financial difficulties and tight domestic supplies.

He said Vietnam will consider increasing national fuel storage capacity and domestic fuel production to avoid future fuel shortages.