Speaking at a meeting on the effect of the Government’s first stimulus package held by the European Chamber of Commerce in Viet Nam, Thuy said recent signs of optimism in the Vietnamese economy were not strong enough.

He added that the Government should also be consistent in its offerings so that all businesses could plan ahead.

"If, for example, the Government withdraws interest support instead of following the schedule now that production is just regaining its composure, it will make things more difficult for business - and they have enough problems," he said.

Thuy also suggested that the Government consider another stimulus package, but on a smaller scale, to support the economy during the post-crisis and recovery period.

Launched last February, the Government’s first stimulus package of VND17 trillion (US$1 billion) offers a 4 per cent interest subsidy to help enterprises maintain production and exports.

The short-term package expires at the end of the year. Two other long-term interest subsidy packages supporting nine key industries and farmers will finish at the end of 2011.

The package scheme has shown positive effects on the economy, reflected in the recovery of Gross Domestic Product from 3.3 per cent in the first quarter to an expected 6.5 per cent this quarter, according to Thuy.

Thuy also suggested that the Government take stronger action to re-order the currency market because he said there was a big gap between the official and inofficial markets which led to speculation.

For instance, yesterday the unofficial rate for American dollars was VND18,200 while the official rate was VND17,800.

International Monetary Fund representive Benedict Bingham said the economic situation in Asia was better than in many other regions as private-sector demand was more robust.

"The timely introduction of monetary and fiscal stimulation did help," he said.

However, he noted that after stabilising the macro-economic situation following bumpy inflationary rises in the third quarter of last year, the spectre of macro-economic instability had started to rise again.

"This is potentially a risk for the year 2010 and the commodity crisis could rise again," said Bingham.

However, he added that inflation was not the biggest concern and suggested immediate action should be taken to control the foreign-exchange market before it placed too much pressure on business.

Source: VietNamNet/Viet Nam News