Vietnam to implement "tight' fiscal, monetary policy in 2012

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Vietnam will have tight fiscal and monetary policies to fight inflation this year, while advancing a restructuring plan to enhance the efficiency and competitiveness of the economy, the government said.

The country will use a "tight, cautious, flexible" monetary policy and "tight, effective" fiscal measures in 2012, according to a resolution posted late yesterday on the government's website. It will also intensify monitoring of domestic markets and prices, according to the resolution.

Vietnam in February last year unveiled measures including lowering credit growth and budget-deficit targets as policy makers tried to slow the pace of price increases. The International Monetary Fund and the World Bank in December said the nation may undermine progress toward economic stability if it loosens monetary policy too soon.

The resolution "suggests that managing macro stability remains the main objective of policy makers," Prakriti Sofat, a Singapore-based economist at Barclays Capital, said in an e-mail. "More is needed to strengthen the economic structure by increasing privatization of state-owned enterprises, consolidation in the banking sector and more efficient state investment," she said.

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The Ministry of Planning and Investment will study and complete in the first quarter a plan for investment restructuring, in which state capital will be focused on key infrastructure projects, according to the resolution.

The dong was little changed at 21,031 per dollar as of 12:10 p.m. local time on Wednesday, according to data compiled by Bloomberg. The benchmark VN Index of stocks closed down 0.3 percent.

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