Fiscal and credit policies must distinguish in operating

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Must distinguish clearly credit policy and fiscal management. Photo: H.Diu

Here, most of the reviews have appreciated the operation of fiscal policy, monetary and coordination between these 2 policies within the goal of macroeconomic stability, controlling inflation and supporting growth. This result is valuable in the political and economic conditions of the world that have many unpredictable happenings such as Brexit, and the Federal Reserve raising interest rates by the end of the year.

The board members agreed to propose to the Government to drastically restructure 5 fields under the resolutions of the Party, and the National Assembly which is restructuring credit institutions, the public sector, public investment, budget revenues and expenditures associated with ensuring public debt safety and restructuring of the system of public service units.

In 2016, the growth rate was lower than the target of 6.7%, mainly due to the declining growth in the agricultural and mining sectors, but the growth momentum was maintained and achieved the growth rate of the economy from 6.3% to 6.5%. Despite the difficulties, fiscal estimates also reached the estimates of National Assembly including local budgets and the Central budget.

The board members also noted the problem of global growth, international trade with trade protection, nationalism, populism and policies of devaluing the national currency will have a negative impact on export growth. Furthermore, the effects of climate change, difficulties in agricultural production, fiscal space for currency and other resources are limited, as well as being the burden for the macroeconomic management of Government.

To operate effectively the fiscal policy and currency in the near future, the Board members proposed the Government to operate fiscal policy as public investment mid-term plan and annual financial plans with the keys being expenditure restructuring and improving the efficiency of public investment and public spending.

For monetary policy, the Government and the State Bank of Vietnam (SBV) continue implementing prudently, flexibly and set the goal of macroeconomic stability to the forefront, strengthening confidence in the VND, in closer collaboration with fiscal policy and credit. Continuing the stability in interest rates.The State Bank calculates the level of money supply in line with economic developments and policy objectives of the Government; distinguish clearly between credit policy and fiscal management.

On behalf of the Government, Deputy Prime Minister, Mr Vuong Dinh Hue recommended the Board continue to supervise closely and carefully evaluate the economic situation of the country and the world to have comments to leaders of the Government when operating macroeconomic policy.