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HANOI: Vietnam has announced a stimulus plan worth more than one billion dollars to avoid recession as the global economic crisis bites into its export-led economy, state media reported Wednesday.
Prime Minister Nguyen Tan Dung approved a number of measures to boost production, investment and consumer spending at a monthly cabinet meeting Tuesday, the official Vietnam News Agency (VNA) reported.
The move comes a day after Hanoi announced a cut in interest rates, from 11 per cent to 10 per cent, to free up credit for struggling firms. The reduction, which came with a reduction in banks' reserve requirement, is the fourth since late October and will take effect Friday.
Dung said the stimulus would fund public works projects, including a large irrigation canal in the northern Red River delta, and help finance rice storage depots for about one million tonnes of grain in major farming areas.
Vietnam's economy grew by 8.5 per cent last year, but the target for this year and next has been scaled back to around 6.5 per cent as the economy has been battered by a widening trade deficit and double-digit inflation.
The premier told the State Bank of Vietnam to ensure companies have access to loans.
Dung also said the government would consider cutting company tax rates and export tariffs for some natural resources and minerals, the VNA report said.
He also tasked the finance ministry and other agencies with quickly providing relief to flood-hit central regions and other programmes for low-income earners and victims of natural disasters.
United Nations Resident Coordinator John Hendra warned in October that high inflation and external economic shocks threaten to plunge many Vietnamese households living on the margins back into dire poverty.
- AFP/yb
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