Hanoi, June 8 - Vietnam will shift emphasis toward expansionary fiscal measures to help meet the government's economic growth objective, as the scope for additional monetary easing becomes limited, Deputy Governor of the State Bank Pham Thanh Ha said in comments reported by state media on Monday.
Ha told the Dau Tu Chung Khoan newspaper that the central bank will not trade away macroeconomic stability for rapid short-term expansion. He reiterated that the central bank remains committed to policies that preserve stability and keep inflation under control.
Officials are targeting a gross domestic product growth rate of at least 10% this year while seeking to hold inflation around 4.5%. Ha noted, however, that inflation has been accelerating and that the country recorded a record-high trade deficit in May. He also pointed to external pressure linked to the Iran war as a factor affecting the economy.
Against that backdrop, Ha said the space available for monetary policy adjustments is narrow. "Given that the current room for monetary policy is narrow, priority should be given to targeted expansionary fiscal policy, making fiscal policy truly a pillar for promoting high and sustainable growth," he said.
On credit conditions, Ha reported that banks' total lending had increased by 3.83% as of April 21 compared with the end of last year. That comes as Vietnam commonly relies on expanded bank credit to support economic activity; authorities this year have set a credit growth target of 15%.
The deputy governor framed fiscal action as the preferred lever for supporting growth given the limited monetary headroom, while underscoring the central bank's role in holding to a course of macroeconomic stability and inflation control.
Contextual summary
The central bank's public comments indicate a policy mix in which fiscal measures are intended to shoulder a greater share of growth support, even as monetary policy stays focused on stability and inflation management. The country is pursuing an ambitious GDP target alongside an inflation objective, amid an accelerating price backdrop and a widening trade deficit influenced by external shocks.