Prime Minister advocates for improved management of monetary and fiscal policies
In a recent official dispatch, Prime Minister Pham Minh Chinh has outlined a series of monetary and fiscal policy measures aimed at sustaining economic growth, controlling inflation, and maintaining macroeconomic stability in Vietnam.
The State Bank of Vietnam (SBV) has been tasked with coordinating with relevant agencies to closely monitor global and domestic economic developments. The SBV is expected to manage monetary policy proactively, flexibly, and effectively according to macroeconomic conditions and government resolutions. This coordination will ensure that monetary policy is closely aligned with fiscal and other macroeconomic policies to promote growth, control inflation, and maintain major economic balances.
Credit institutions have been instructed to continue cutting operating costs, streamlining administrative procedures, and accelerating digital transformation. This move aims to support production and business activities of enterprises and individuals while harmonising benefits and sharing risks. The PM has also requested measures to handle and prevent bad debts, with an overall credit growth target of approximately 16% for 2025 and further targets for 2026.
The PM has directed the agencies to manage the exchange rate flexibly, diversify foreign currency supply channels, stabilise the value of the Vietnamese dong, and improve the balance of international payments. The measures include ensuring close coordination between monetary and fiscal policy to reinforce economic stability amid uncertainties in global markets and tariff impacts.
In addition, the PM has asked for the implementation of draft decrees detailing the implementation of laws and resolutions related to the financial sector passed at the 9th session of the 15th National Assembly. The dispatch is addressed to ministers, heads of ministerial-level and government agencies, Secretaries of Party Committees, Chairpersons of People's Committees of provinces and centrally-run cities, chairpersons and general directors of state-owned groups and corporations.
The PM has also requested accelerating credit programmes for people under 35 to buy, rent, or lease-purchase social houses. Furthermore, a VNĐ500-trillion credit package is requested for businesses investing in infrastructure, science and technology, innovation, and digital transformation.
The PM has urged the agencies to review, analyze, and assess impacts; study international practices; and consider removing administrative tools in credit growth management through allocating credit growth targets to each credit institution. By 2026, credit growth management is expected to transition to a market-based mechanism, eliminating credit quotas. The total number of centrally funded projects in the 2026-2030 period must be capped at 3,000.
Lastly, the PM has requested ministries, agencies, and localities to proactively monitor domestic and international developments and take stronger, more decisive action to accelerate public investment disbursement. The review and proposal must be completed by July 2025.
These measures are part of the PM's efforts to achieve the economic growth target of around 8% or higher in 2025 while controlling inflation near 4.5%. The PM's directives emphasize careful coordination of monetary and fiscal policies, stable exchange rate management, support for credit institutions to reduce lending costs, and proactive monitoring of economic conditions to achieve these targets.
- The Prime Minister has urged the State Bank of Vietnam (SBV) to manage monetary policy effectively, aligning it with fiscal and other macroeconomic policies for growth and inflation control.
- Global and domestic economic developments are to be closely monitored by the SBV, as per the PM's instructions, to enable proactive and flexible Monetary Policy decisions.
- In addition to supporting production and business activities, Vietnam's credit institutions are directed to streamline administrative procedures, accelerate digital transformation, and handle bad debts.
- To maintain economic stability amidst global market uncertainties and tariff impacts, the PM has outlined measures for flexible exchange rate management, diverse foreign currency supply channels, and stabilizing the Vietnamese dong.
- The PM has requested the implementation of draft decrees related to the financial sector, addressing ministers, heads of agencies, and other officials. He has also asked for credit programmes for younger citizens and businesses investing in infrastructure, science, technology, and digital transformation.
- The PM has emphasized the need to assess impacts, study international practices, potentially remove administrative tools in credit growth management, and transition to a market-based mechanism by 2026, while capping the total number of centrally funded projects in the 2026-2030 period at 3,000.
