Manila - The Asian Development Bank (ADB) said Tuesday it was providing Vietnam with a short-term 500-million-dollar fiscal stimulus loan to help efforts to boost its domestic economy and ensure social stability. The Manila-based bank said the five-year loan would provide budgetary support for Vietnam to finance critical public expenditure programmes in 2009 and 2010 in order to counter the adverse impacts of the global economic downturn.
Vietnam has suffered a slump in foreign direct investment, exports and remittances due to the global economic crisis.
Its economy is projected to expand by only 4 to 5 per cent in 2009, a marked slowdown from an average of 7.6 per cent in the past four years.
"Economic growth below 5 per cent could lead to higher unemployment and under-employment among the young labour force," the bank said in a statement.
The loan would come from the bank's Countercyclical Support Facility, which was set up in June to help developing member countries cope with the global economic downturn. The bank earlier approved two similar loans to the Philippines and Kazakhstan.
"The loan will allow the government to meet its financing needs and support economic growth in a fiscally responsible way during a challenging period for the global economy," said Arjun Thapan, director general of ADB's South-East Asia Department.
"The government will be better able to protect its social spending and poverty alleviation programs and objectives, and continue with its longer-term development objectives in 2009," he added.
