Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam (SBV) to consider raising the deposit interest rate ceiling, but to stabilize lending interest rates.

GDP (gross domestic product) growth has slowed down. The risk of falling to the middle-income trap and economically lagging behind exist.

According to former deputy director of the Banking Strategy Institute Pham Xuan Hoe, while demand for capital is very high, the credit growth limit has been controlled too strictly, which has put a brake on the economic recovery process.

The State Bank of Vietnam (SBV) has recently begun mentioning credit loosening. VietNamNet spoke with Pham Xuan Hoe, former deputy director of the SBV’s Banking Strategy Institute, about the issue.

“Someone told me they had a feeling that the CPI is not correct. I asked them on what grounds. Scientifically, that cannot be proven,” said economist Vo Tri Thanh.

The nation’s economic recovery has accelerated over the last six months on the back of a resilient manufacturing sector coupled with a robust rebound in services, according to a World Bank (WB) economic update for Vietnam released on August 8.

Monetary and fiscal policies have been tightened to fight inflation in Vietnam (though it is among the lowest in the world), instead of aiming to recover production and boost growth, which is needed after several years of pandemic.

Experts gathered in Hanoi on August 4 to discuss how to deal with the continuing high prices of commodities in Vietnam despite petrol prices being reduced.

The price of live hogs has dropped dramatically, causing losses to farmers. Meanwhile, consumers still are buying pork at high prices and the profit is going to merchants’ pockets.

Statistics show a stable situation now, but there are warning signs that if Vietnam cannot curb inflation, the situation will be insecure.

Contrary to all predictions, food prices have remained high despite the sharp fall of gasoline prices.

The sharp increases in material prices in H1 and the small support packages to businesses have put pressure on companies.

From its peak, petrol prices have fallen by 20.7-25.6 percent to the level of five months ago. However, food and foodstuff prices have not dropped.

Although gasoline prices have dropped sharply, many products have merely decreased slightly or kept their old prices.

Despite the global economy enduring an array of unpredictable fluctuations, the timely introduction and effective implementation of Government policies have contributed to Vietnam avoiding external shocks whilst also promoting growth.

The price increases of crude oil and input materials of many industries have led to increases in finished products, putting a burden on businesses and people.

It was recorded that, on the last two days of the week in Ho Chi Minh City, the number of people flocking to traditional markets, supermarkets, and trade centers increased sharply.

Vietnam’s economy continued to expand in the second quarter of the year, with gross domestic product (GDP) growing 7.7% year on year, the highest quarterly growth rate in 11 years.

SBV will continue to keep interest rates unchanged in order to sustain macro-economic stability and control inflation, in contrast with the ongoing trend adopted by central banks of many countries worldwide, according to economic experts.