The National Advisory Council on financial and monetary policy held it's periodic meeting under the chairmanship of Deputy Prime Minister Vuong Dinh Hue on December 21, 2016 in Ha Noi.
At the meeting, the Council’s members unanimously agreed with the SBV’s assessment and the conclusion of the Government on macroeconomic and fiscal and monetary policy regulation achievements of 2016. The Deputy Prime Minister greatly appreciated the contributions made by fiscal and monetary policy management results in the successful implementation of the socio – economic objectives set by the National Assembly.
The highlighted achievements are reflected in such fields as inflation management, stable interest-rate management, credit growth, stock exchange and capital markets growth which is better as compared to that of regional countries, the international reserve obtained the highest level ever. These achievements are truly meaningful in the context of facing the strong and complicated fluctuations of the global and regional financial and economic situation.
The Council members put forward a demand to decisively implement the restructuring of the five fields in line with the Central Committee of the Communist Party of Vietnam and National Assembly resolutions, specifically the restructuring of credit institution system, enterprises, public expenditure, national budget collection and spending, in combination with ensuring safe public debt management and the restructure of state nonproductive units.
In 2016, economic growth is forecasted to be lower than the set target of 6.7% mainly due to the decrease in the agricultural and mining sectors, however the motivation of economic growth still remains and ensures a growth rate of 6.3 – 6.5%.
The Council was also concerned about the global growth outlook, international trade, specifically trade protectionism, nationalism, and the devaluation of currencies that could badly affect export expansion. Other factors including climate change, production in the agricultural sector, fiscal and monetary management might have to deal with more difficulties, causing more challenges to the Government’s macroeconomic regulation.
In order to effectively manage fiscal and monetary policy in the coming time, the Council’s members called on the Government to regulate fiscal policy in line with mid-term public investment and annual fiscal plans with more focus on restructuring state budget spending and improving public investment and expenditure.
For monetary policy management, the Government and the SBV should continue to implement a prudent and flexible monetary policy with the top priority being macroeconomic stability and improvement of public confidence in the VND. It is important to closely combine monetary policy with fiscal and credit policies. The interest rate should continue to be stabilized. The SBV shall have to supply money in an appropriate manner in line with economic movements and the objectives set out by the Government.
On behalf of the Government, Deputy Prime Minister Vuong Dinh Hue asked the Council to continue to closely follow up and thoroughly assess the international and domestic economic situation in order to recommend specific measures to the Government to support macroeconomic regulation. He greatly appreciated the recommendations of Council members on the restructuring of the five above-mentioned sectors aimed at unlocking development resources including both the institutional and economic resources of the national economy.
MH