Vietnam to Speed Up Spending, Bank Lending to Boost Economy
Vietnam will accelerate spending and boost bank lending to bolster an economy which grew at the weakest pace since 2009. Stocks climbed amid optimism the measures will lift corporate earnings.
The government expects to boost disbursement to 21 trillion dong ($1 billion) a month for the rest of the year, with funds from the state budget as well as loans and grants from multilateral agencies such as the World Bank and donor nations, Nguyen Xuan Phuc, deputy prime minister, told the National Assembly today in Hanoi.
The measures “will help increase market demand, reduce companies’ stockpiles and sufficiently help businesses and bolster the economy,” Phuc said. The government’s full-year credit-growth target is 12 percent to 13 percent, he said.
The Ho Chi Minh City Stock Exchange’s VN Index (VNINDEX) rose 1.8 percent to 432.87 at 1:23 p.m. Bao Viet Holdings (BVH), the country’s largest listed insurer, climbed 3.5 percent to 50,000 dong, heading for the biggest advance since June 7. Joint-Stock Commercial Bank for Foreign Trade of Vietnam or Vietcombank, the biggest listed lender by market value, climbed 3.8 percent to 30,300 dong.
Gross domestic product expanded 4 percent in the first quarter, the weakest pace since 2009. Vietnam’s economy may expand 4.31 percent in the first half of the year, Phuc said. Growth may be as low as 5.2 percent in 2012, Deputy Minister of Planning & Investment Cao Viet Sinh, said in an interview on June 5, which would be the slowest pace in more than a decade.
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