The government of Vietnam and the World Bank has signed an agreement for financing of 221.5 million U.S. dollars to support the country's recovery from the COVID-19 pandemic through policy reforms.

The credit is a budget support operation and comes in the form of concessional terms for a period of 30 years with a grace period of five years, World Bank said Monday in a press release.

The loan will encourage policy reforms under two pillars, with the first supporting an inclusive economic recovery by easing the tax burden on businesses, improving access to financial assistance among vulnerable groups, reducing gender gaps in the workplace, and promoting financial inclusion. The second pillar contributes to greening trade policies, accelerating the adoption of e-government, and increasing the uptake of renewable energy.

According to the bank, the Vietnamese government has moved quickly in recent months on the implementation of those reforms. The pace of reform is expected to accelerate as part of the recovery package to be discussed at the National Assembly next week, it said.

In October, the World Bank lowered Vietnam's economy growth forecast for this year to between 2 and 2.5 percent as the third quarter figures revealed the severe impacts of the fourth COVID-19 wave, well below the August forecast of 4.8 percent.