Vietnam to cut public spending, issue fewer bonds

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Vietnam plans to cut back on public spending and issue fewer government bonds in an attempt to tame inflation this year, an official said.

Minister of Planning and Investment Vo Hong Phuc told Tuoi Tre that the state will focus on covering projects that can be completed in a year or two in 2011. Other, long term, projects will be delayed, he said.

The government will only issue VND45 trillion (US$2.3 billion) worth of bonds this year, compared to its previous plan to issue VND63 trillion bond, he said.

The minister added that amid the global rise in the cost of commodities like oil, food and production materials, the government has planned for a year-long, coordinated strategy to keep inflation at 7 percent or less in 2011.

Under the plan, Phuc said that the State Bank of Vietnam will continue to control the money supply and ensure liquidity in the banking system; the Finance Ministry will revise price regulations and the Ministry of Planning and Investment will employ stronger oversight on projects funded with government money.

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