Vietnam sees one-sixth of stimulus package spent in 8 months

About VND55 trillion ($2.34 billion) from Vietnam’s post-pandemic stimulus package of VND350 trillion ($15 billion) was disbursed over eight months, the country’s planning ministry said Tuesday.

The amount was counted until September 2, about one-sixth of the total, Minister of Planning and Investment Nguyen Chi Dung told a government meeting in Hanoi.

This spending included more than VND10,000 billion ($425 million) as preferential loans from the Social Policy Bank, with VND3,045 billion (129.4 million) having reached some 4.54 million laborers nationwide as housing rental assistance.

The minister said the accommodation assistance is lower than expected due to complicated procedures and differences between booking and real figures, while in some localities, leaders have lacked determination.

Dung added the package’s initiative that reduces bank loan interest rates by about two percentage points has disbursed VND13.5 billion (over $574,000) to businesses. Tax reduction and longer tax and fee deadlines were also part of the eight-month disbursement.

The National Assembly approved the stimulus package this January for the Government to carry out the country’s Program for Recovery and Development. At a legislative body sitting this June, many legislators showed concern that the package was disbursed slowly.

Deputy Prime Minister Le Minh Khai then explained that it was necessary to proceed “with caution to avoid mistakes” as it is a huge package. The government then set up a steering committee led by him in early July to help speed up work.

Vietnam’s economy grew 2.58% in 2021 due to the Covid-19 pandemic, slipping from a 2.91% expansion in 2020, the first pandemic year. The World Bank this August revised up the country’s GDP prediction to 7.5% for this year, much higher than the forecast of 5.8% in early June as “economic activity continues to normalize.” In April, the global bank put its projection at 5.3%, and 4% in the worst-case scenario.

The IMF said in July that Vietnam’s growth is expected to reach 6% in 2022 as activity normalization continues and the Program for Recovery and Development is implemented.