The Vietnamese economy is likely to face severe difficulties this year due to the impact of the financial crisis that is spreading around the world.
The current crisis is different from the one in 1998 in that it has occurred in the strongest and healthiest economies, including the US, Europe and Japan.
They have been throwing thousands of billions of dollars in a vain effort to stimulate the economy.
The crisis originated in the financial sector and then spread to the production and consumption sectors. It is therefore really hard for economists and policymakers to prescribe a particular course of treatment.
Vietnam, no longer cut off from the world economy, is predicted to be hit too. But the crisis here began in the production sector and later spread to the financial sector.
The global crisis first had an impact on the country’s exports and foreign investment.
The growing concern now is how to restore stability and achieve growth.
One of the key recommendations has been to ensure jobs for workers to help maintain social order. Another is to loosen monetary policy to stimulate the economy and achieve growth.
To create more jobs, the Government will soon implement its economic package, worth US$ 1-2 billion and targeted at large, labor-intensive projects. Tax breaks will be offered to enterprises affected in the final quarter last year or likely to suffer this year.
Last year the country only achieved economic growth of around 6.5 percent, but it was an encouraging sign considering the global situation.
Considering everything, positive signs will be seen despite the downturn if the government is nimble with its monetary policies.
