HANOI (Vietnam/ANN): Support packages from the Government and banks would contribute to partly reducing difficulties for enterprises affected by Covid-19, but stronger measures should be taken for the hardest-hit industries, experts said.
Prime Minister Nguyễn Xuân Phúc announced at a meeting last week that a VNĐ30 trillion fiscal support package would be implemented to help businesses cope with the coronavirus epidemic.
The Government hasn’t so far detailed the plans for the fiscal package, but it was forecast that on top of fast-tracked public spending on infrastructure projects, government spending will also be directed toward industries which are hard-hit by the virus. These industries include tourism, transport and agriculture.
Banking and financial expert Nguyễn Trí Hiếu said it was necessary and urgent for the Government to provide the support packages for businesses as many firms had used bank loans but now, they had to scale down or even disrupt their production and business due to the epidemic. “As the loans come from commercial banks, without any aid from the central bank, I think the interest rate will remain high for struggling firms as banks still have to pay high input costs and earn profits, ” Hiếu told Vietnam News.
It was difficult for banks to boost lending at this time as capital demands were very low, Hùng said, citing SBV’s data that credit growth of the entire banking system in the first two months of this year slowed sharply, inching up only 0.06 per cent against the 1 per cent rate in the same period last year, due to adverse impacts of the Covid-19 epidemic. Compared with the end of last year, credit even decreased by 0.18 per cent.
Central banks of many other countries have so far also taken strong measures, attempting to contain the coronavirus’ economic fallout, Hiếu said, citing the Federal Reserve last week was the latest to slash its interest rates by half a percentage point, its biggest single cut and first emergency rate move in more than a decade since the depths of the 2008 financial crisis, as a pre-emptive move to protect the economy from the coronavirus.
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