Gov’t says will decide second stimulus in late October

"Will there be a second stimulus package? The Government will have more research and discussions on this topic during the next October meeting,” Phuc told reporters on Thursday (06 Oct 2009) after the monthly meeting for September.

The Government will look into the issue thoroughly, since it would only be necessary if Vietnam and the world are still in economic crisis. Otherwise, the package would cause an unsound economy with weak competition, he said.

The Government appraised the first USD8-billion stimulus package that has bailed the economy out of serious impacts of the global financial meltdown, curb the economic downturn, as well as protect the financial, banking and business system in the country, Phuc said. Phuc at the briefing also echoed how the Government had been appraising the economic recovery in the year to date.

The Government said that gross domestic product (GDP) growth rate reached 4.56% during the first nine months of this year on an accelerating tempo, as GDP expanded by 5.76% in the third quarter alone.

Industrial production value reached over VND63 trillion, or a surge of 13.8% year-on-year while the construction sector rose by 9.7%.

The overall investment in society amounted to over VND480 trillion in the first nine months, increasing 14.4% year-on-year. Foreign direct investment (FDI) capital in particular was around USD 7.2 billion while disbursement of investment credits reached VND18.8 trillion as of the end of last month.

Social security in the country was also ensured during the economic crisis. Around 90% of overseas development assistance (ODA) capital this year had been disbursed, he said.

Given the positive growth rate in the period, it is highly likely Vietnam will realize its revised GDP growth rate target of over 5% this year, Phuc quoted Prime Minister Nguyen Tan Dung. However, the nation will have to exert all efforts to achieve a GDP growth rate of 6.8% in the last quarter of this year to realize the annual target. The most important polices are to supervise the State’s budget deficit, fight inflation, and stabilize the balance of payments, Phuc added.

Concerning the 2010 vision, the Government expects to revise up some macro economic targets thanks to the brighter outlook. All monetary and fiscal polices next year would be set to help boost economic growth momentum.

The Government is looking to reduce the State’s budget deficit below 5% when all disbursements for economic stimulus have ended.