|It is necessary to coordinate smoothly and closely between fiscal and monetary policies. Source: Internet|
During implementation, competent authorities need to pay attention to the movements of the market, the economy, arising risks and thereby take measures to manage risks and make timely adjustments.
The support program for economic recovery under Resolution No. 43/2022/NQ-QH15 is being implemented with a total scale of nearly VND350 trillion. In particular, the total size of the fiscal solution is up to VND291 trillion, accounting for 83% of the total value of the Program.
The business community and people are looking forward to the early support policy solutions to be deployed and implemented effectively, ensuring the right audience, no losses, and no waste.
Dr. Le Duy Binh, Managing Director of Economica Vietnam, said that the expectations of the market, businesses and people for different components of the support program were very high. Faced with such expectations, the responsibility of agencies, especially ministries, sectors and localities would be significant.
“Therefore, the strong and drastic involvement with a high sense of responsibility of ministries, sectors and localities from the first days after Resolution 11/NQ-CP was issued would play an important role to promote the effectiveness of the Program,” Dr. Le Duy Binh said.
According to economic expert Le Duy Binh, the components of the program almost all have very clear addresses, from the perspective of ministries, sectors and localities that propose or are responsible for implementation. Thus, the supervision of the responsibilities of ministries, sectors and localities is therefore also easier.
The effectiveness of the Program’s implementation, including its socio-economic, environmental and resource efficiency, loss prevention could easily be assessed, and the responsibilities of ministries, sectors and localities could also be easily identified and traced.
The supervision of socio-political organizations, the business community and people would be enhanced and contribute to improving the effectiveness of the Program.
However, besides the positive effects, expert Le Duy Binh also said there are potential risks from a macroeconomic perspective during the implementation of the Program.
Along with that, a representative of Economica Vietnam also said that the Program had a bold shadow of fiscal solutions, but it did not mean that the role of monetary policies would be lower.
On the contrary, operating policies on interest rates, exchange rates, and credit growth will have great impacts on the recovery and growth process in the coming years. This shows the requirement of smooth and close coordination between fiscal and monetary policies.
The large role of fiscal policy means greater responsibility for these solutions in the implementation process. Fiscal solutions must also actively coordinate with monetary solutions, without putting too much pressure on inflation, on the commercial banking system, or affecting the principles of healthy trade activities of the banking system.
In the opposite direction, Dr. Le Duy Binh believed that monetary policies would support the disbursement of a large amount of capital into the economy, but it would not greatly affect inflation or the lending rates of businesses.
Similarly, close coordination of policies and implementation of solutions also needed to be effectively implemented among other ministries and especially with localities.
Previously, sharing about the preparation of the Ministry of Finance for the implementation of the economic recovery support package, Mr. Nguyen Minh Tan, Deputy Director of the State Budget Department (Ministry of Finance) said that this program was very demanding in terms of both size and time to implement.
Regarding resources to implement the Program, a representative of the State Budget Department said the overall support package would come from three sources, including an increase in the state budget deficit; increased revenue from savings of the central budget in 2021; the third source was essentially the interference between credit policy and fiscal policy, that was increasing guarantees for the Bank for Social Policy and the state budget would compensate interest rates and management costs for Vietnam Bank for Social Policies to implement.