Vietnam’s credit growth on track to hit 15% target by year-end
The Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has expressed confidence that the country's credit growth is poised to surge in the final months of the year, making the 15% growth target for 2024 entirely achievable.
Credit growth is strong, with the target likely to be achieved (Photo: VietnamPlus)
Hanoi (VNA) – The Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has expressed confidence that the country's credit growth is poised to surge in the final months of the year, mak🗹ing the 15% growth target for 2024 entirely achievable.
Data from the SBV revealed that credit growth has already surpassed 9%, marking a 16% year-on-year increase. This robust growth rate, nearly three times the average pace of the earlier months of this year, is seen as a positive signal for the economy.
During a recent Government teleconference with representatives from all 63 localities, Hong reported that as of August 26, credit growth had risen by 6.63%.
Economists are optimistic, predicting that with numerous signs of economic recovery, the demand for credit will surge in the near future.
Dr. Nguyen Duc Do, Deputy Director of the Ministry of Finance’s Institute of Economics and Finance, predicted that credit growth in the coming months will approach the set targets, especially if economic conditions continue to improve. He said pressure on exchange rates will ease, and the SBV may lower its operating interest rates, keeping lending rates low to facilitate borrowing.
Experts noted a slowdown in the trend of rising deposit rates, with only a handful of banks adjusting rates onward in September. This stability in deposit rates suggests that liquidity within the banking system remains relatively abundant, further supporting economic growth.
Economic growth is showing improvements in both supply and demand (Photo: VietnamPlus)
Nguyen Duc Thach Diem, General Director of Sacombank, stressed the need to continue reducing capital costs and lowering lending rates to improve access to capital. She called for the introduction of more preferential credit packages for specific industries as directed by the Government and the SBV.
Additionally, she highlighted the importance of collaborating with industry associations to establish mechanisms that offer preferential products and interest rates, enabling customers to access affordable capital and boost loan growth.
SBV Governor Nguyen Thi Hong believes a 15% credit growth target is feasible (Photo: VietnamPlus)
According to expert Nguyen Tri Hieu, what is needed is a better demand stimulation policy rather than relying solely on fiscal policy. To support economic growth in the upcoming period, fiscal policy should continue to play a leading role, with targeted and focused expansion linked to accelerating public investment disbursement. Regarding monetary policy, it should be proactive and flexible, making it easier for firms to access capital.
SBV Governor Hong also noted that the banking sector has instructed credit institutions to actively review their financial situations and prepare documents for the transfer of two zero-dollar banks. The SBV is also directing relevant units to quickly finalise reports on the remaining two banks for submission to the Prime Minister.
To facilitate the flow of credit, she stressed that since 98% of Vietnamese firms are small and medium-sized, there is a need for evaluations to enhance credit guarantees for them, thereby enabling a smoother flow of credit, she said.
As Vietnam continues to navigate the global economic landscape, the SBV's proactive measures and collaborative efforts with industry associations are set to drive credit growth and support the country's economic ambitions./.
Expanding investments to drive economic growth is a priority in achieving the target of 15% set for this year, said Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.
Many banks, which used to focus on lending to individual (retail) customers, have had to shift to expanding corporate lending to achieve credit growth in the first half of 2024.
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