Resolution No. 128/NQ-CP adopting provisional guidelines on safe adaptation to the COVID-19 pandemic is much welcome as it will reduce substantially unnecessary burden on people and businesses, as well as uncertainty and investors, including domestic and Foreign Direct Investment (FDI) ones, are reacting well to more predictability in the environment.
Carolyn Turk, World Bank (WB) Country Director for Viet Nam, made the statement on October 13 while participating in a webinar discussing measures to boost post-pandemic economic recovery, adapt flexibly to the COVID-19 pandemic, overcome economic disruption, and strengthen locality-to-locality connectivity.
The country's fundamentals are strong, and the World Bank remains optimistic about the country's longer-term growth trajectory, she said, adding that the future will be determined in part by what the government does in the next six months.
Carolyn Turk emphasized that the Vietnamese government has already reacted by vaccinating people at a rapid pace (over 1 million per day) and adopting a new government resolution providing a nationally uniform framework for mobility restrictions.
She suggested Viet Nam should use more its fiscal policy to start the economic recovery, adding that there is sufficient fiscal space as the debt level is only about 56 percent of GDP and has only marginally increased in the past year, while revenue collection has been performing relatively well.
Meanwhile, borrowing costs are at their lowest level over the past few decades – in both domestic and international markets, as today the Government could actually borrow in EURO at almost zero cost, said Carolyn Turk.
“The good news is that Viet Nam can spend more without additional borrowing. This could be achieved by reallocating unspent resources or by allocating not-allocated resources–both at the central and sub-national levels. The key constraint might not be money but the existing rigidities that prevent its efficient use in the short-term”, stressed Carolyn Turk.
by The world and VietNam report