In an effort to boost Vietnam’s relatively slow economy, the country’s central bank started an economic stimulus this week with a proposal that includes cutting corporate income taxes 30%, deferring sales taxes for six months, reducing some land leases by 50%, and limiting the cost of business loans to 3% above deposit rates.
Although short-term commercial lending rates could still be as high as 15%, that’s significantly lower than last year’s rates when the inflation rate for Vietnam topped 20% at one point. The cap applies to exporting industries as well as relatively small enterprises.
The changes are another indication that Vietnam is attempting to move assertively to strengthen its economic growth while maintaining tis effort to get the cost of living under control, and perhaps down into single digits before the end of 2012. Vietnam’s public equity markets have responded positively so far this week.
More on Vietnam’s 2012 economic stimulus