Government proposes NA continue 2% interest rate support policy

Presenting the results of the implementation of the NA’s Resolution 43/2022/QH15 (Resolution 43) on fiscal and monetary policies to support Vietnam’s post-pandemic socio-economic recovery and development at the NA's 6th session on October 23, Minister of Planning and Investment Nguyen Chi Dung said that after nearly two years of performance, Resolution 43 has proved to be a correct and timely decision of the NA as Vietnam's socio-economic situation faced many difficulties and challenges due to the COVID-19 pandemic.

Implementing the resolution, the Government in May 2022 issued Decree 31/2022/ND-CP on a 2% interest rate reduction in  loans of enterprises, cooperatives, and business households.

By the end of August 2023, the amount of interest rate support was equivalent to about 1.95% of the resources approved by the NA, with outstanding loans reaching nearly VND57 trillion (US$2.31 billion) for more than 2,100 customers.

In addition, by the end of September 2023, the Vietnam Bank for Social Policies disbursed preferential credit of more than VND21 trillion to more than 366,000 customers, disbursed about VND3.679 trillion in rental support for 128,746 employers and nearly 5.2 million employees.

The Government also developed a list and level of capital allocated to tasks and projects in line with the provisions of the Law on Public Investment and the principles, criteria, and subjects of capital allocation. The Government urgently completed investment procedures for projects using capital from the socio-economic recovery programme.

The Government allocated more than VND166 trillion of the 2022 and 2023 capital plans, contributing to accelerating the construction of socio-economic infrastructure projects, highways, and large bridges.

Besides the positive results, shortcomings and limitations remained, relating to the issuance of relevant instructions, forecasting, and calculating work. The implementation and disbursement of some issued policies failed to meet expectations. The policy implementation in some places and sometimes not flexible nor proactive, thus the allocation and disbursement of the programme's capital for tasks and projects is still slow, creating great disbursement pressure, especially in the 2023 plan.

On that basis, the Government proposed the NA permit it to continue the 2% interest rate support policy.

Presenting an assessment report, Chairman of the NA's Economic Committee Vu Hong Thanh highly appreciated the efforts and drastic, positive, and timely direction of the Government, the Prime Minister as well as the participation of ministries, agencies at central and local levels on implementing Resolution 43.

The implementation has had positive impacts, helping businesses to solve difficulties, supporting production and business, promoting economic recovery, and making important contributions to socio-economic development results in 2022 and 2023.

The results were highly appreciated by voters, and people and recognised by the international community, Thanh said.

He said that in the context of low credit growth in the first nine months of 2023 and slow capital disbursement of the economic recovery programme, the NA’s Economic Committee agreed with the Government's proposal to continue the interest rate support policy.

The committee also agreed to propose the NA extend the disbursement time for development investment capital plans allocated for investment projects of the programme until the end of 2024.

The committee requested the Government to continue to harmonise capital for projects to ensure the efficiency of capital use and enhance investment efficiency.