Fiscal and Monetary Policies to Drive Post-Pandemic Recovery
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On December 5, the National Assembly’s Economic Committee, in collaboration with the Central Economic Commission and the Vietnam Academy of Social Sciences, held the Vietnam Economic Forum 2021 under the theme “Recovery and Sustainable Development.”
At the event, experts and researchers from the Economic Committee presented proposals for a comprehensive fiscal and monetary support package to accelerate Vietnam’s post-pandemic recovery.
Opening the forum, National Assembly Chairman Vương Đình Huệ emphasized that over the past two years, the Covid-19 pandemic has caused severe socio-economic damage worldwide, including in Vietnam.
He noted that countries around the world have implemented diverse fiscal and monetary stimulus measures to mitigate the impacts and restore growth.
“Vietnam has flexibly and comprehensively applied fiscal, monetary, and macroeconomic policies to overcome the pandemic’s impacts and support economic recovery,”
said Chairman Vương Đình Huệ, highlighting that the National Assembly has already approved frameworks for economic restructuring, fiscal policy, and public investment for the 2020–2025 period.
Proposal for an Economic Recovery Package of VND 843.8 Trillion
At the forum, Dr. Cấn Văn Lực, Chief Economist of BIDV and representative of the research team under the Economic Committee, presented detailed policy recommendations.
He emphasized that fiscal and monetary policies must:
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Align with the Party’s orientations and government policy,
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Coordinate flexibly across sectors,
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Be large enough in scale, long enough in duration, and focused on key areas.
According to the proposal, the total support package is estimated at VND 843.845 trillion (≈ USD 36 billion), equivalent to 10.38% of GDP in 2021. The actual disbursement value would be around VND 445.76 trillion (≈ 5.48% of GDP).
Key Components of the Proposed Support Package
1. Fiscal Policy (VND 389.2 trillion – 4.79% of GDP)
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Infrastructure investment: VND 150 trillion
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Public spending and investment stimulus through government bonds and public-private partnerships
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Tax and fee reductions to ease business pressure
2. Monetary Policy Measures
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Continue implementing and, if necessary, extend Circular 14 to support debt restructuring and interest relief
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Use open market operations to keep lending rates low, targeting an average reduction of 0.5–1% in 2022 and stability through 2023
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Refinancing loans for social and affordable housing projects worth VND 65 trillion, with VND 6.1 trillionallocated for interest rate compensation
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Maintain the ratio of short-term capital for medium- and long-term loans; set credit growth targets of 13–14%for 2022–2023
3. Social Welfare and Labor Support (VND 12.8 trillion)
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Provide housing rent support for migrant workers in four key economic zones
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Vocational training and reemployment programs for workers affected by the pandemic
4. Additional Policy Support (VND 37.65 trillion)
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10% reduction in electricity, telecom, and service costs during 2022
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Support for digital transformation, startup enterprises, and innovation projects
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Financial assistance for technology upgrades in manufacturing and processing sectors
Funding Sources and Implementation
To finance the package, the research group proposes allowing the state budget deficit to temporarily increase by 1 percentage point per year in 2022–2023.
Key funding sources include:
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Government bonds: VND 220.06 trillion
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State divestment and equitization: VND 80 trillion
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Deposits from insurance and social funds to purchase government bonds: VND 51.1 trillion
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Expenditure savings: VND 29.2 trillion
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Off-budget funds: VND 20 trillion
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Potentially, a small share of foreign exchange reserves, if necessary.
Goals: Sustainable Growth and Social Stability
Chairman Vương Đình Huệ underscored that the Vietnam Economic Forum 2021 serves as a vital platform to:
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Analyze international experiences,
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Strengthen the scientific and practical basis for Vietnam’s fiscal and monetary strategies, and
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Ensure that economic policies balance pandemic control with sustainable development goals.
The proposed VND 843.8 trillion recovery package is expected to stimulate investment, restore production, support employment, and revitalize domestic consumption, thereby laying the groundwork for a strong, inclusive, and resilient recovery in 2022–2023.