On May 8, 2021, from the headquarters of the State Bank of Vietnam (SBV), Governor Nguyen Thi Hong attended the virtual Global Economy Meeting (GEM) organized within the framework of the All Governors’ Meeting of the Bank for International Settlements (BIS).
Governor Nguyen Thi Hong attends BIS Global Economy Meeting
The GEM was chaired by Mr. Jerome Powell, Chair of the Board of Governors of the Federal Reserve System. Also attending the Meeting, there were Governors and Deputy Governors of 63 BIS member central banks.
The main theme of the GEM was to focus on the two topics of the combination between the fiscal policy and the monetary policy for the prospects of the macro-economy and the financial sector, as well as the meaning of this combination in the context of the complicated situations of the COVID-19 pandemic and inadequate efficiency of the anti-COVID-9 vaccination campaigns around the world.
At the Meeting, representatives from several central banks made presentations on the economic situations in their countries and various economic measures to overcome the difficulties caused by COVID-19.
Speaking at the Meeting, Governor Nguyen Thi Hong shared that the fiscal policy and the monetary policy has been regulated synchronously by the Government of Vietnam, from the information exchange and provision, planning and forecasting to the policy implementation under the overall management measures of the Government, with the aims of maintaining the stability of the macro-economy, the financial and money markets, and supporting a sustainable economic growth. This has been maintained continuously and consistently in an efficient mannner before and during the pandemic. In 2020, due to the negative impacts of the COVID-19, not out of the common trend in the world, the State budget deficit in Vietnam was estimated to increase to 3.99% of the GDP, the ratio of the public debt over the GDP increased to 55.3%. However, the State budget deficit was still under control, the ratio of the public debt over the GDP was still lower than the ceiling allowed by the National Assembly of Vietnam (65% of the GDP). The monetary policy management has been conducted in rapid interaction with the fiscal policy in order to reduce sharply the pressure on the common interest rates; accordingly, the SBV has thrice cut down the key interest rates, maintained the abundant liquidity of the system; supported the capital mobilization with low interest rates for the State budget.
In Vietnam, the Government has been relatively successful in containing the pandemic; the liquidity of the system has been abundant; the Government bond and corporate bond markets have been stable; the fiscal and monetary policy measures have proven to be effective; the GDP in 2020 and in the first quarter of 2021 grew by 2.91% and 4.48% respectively, and the target growth rate for 2021 has been set at 6.5%.
Le Hang