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The VBI News blog of VBI is a multi-dimensional perspective on Vietnam Business Infomation. You can find important economic news, expert’s reviews & opinion in this blog. The most updated business and financial news on Vietnam Economy with facts & figures will be covered. Readers are given critical information may affect your money while doing business in Vietnam.

Vietnam’s 2023 credit growth to be lower than planned

Vietnam’s 2023 credit growth to be lower than planned
Credit growth of Vietnam in 2023 is forecast to reach about 8.4%, lower than the plan of 14.5%. As of the end of November, the outstanding balance of the entire banking system was more than 6%, equivalent to about 735 trillion VND.

Large room for credit growth

Vietnam News Agency (VNA) reported that on the afternoon of November 30, chairing a meeting with ministries and branches on managing credit growth at the end of 2023, Deputy Prime Minister Le Minh Khai stated that there was only one month left until the end of the year but credit growth had not reached the target set at the beginning of the year.

The State Bank's report shows that, as of November 23, the entire system's outstanding debt increased by 8.38% compared to the end of December last year. The remaining room for credit institutions to expand credit growth is very large, about 6.2%, equivalent to about 735 trillion VND.

The State Bank

However, credit growth in recent times has not been high mainly because the economy is still facing many difficulties while the recovery process is still slow, so credit demand has decreased and the capital absorption capacity of businesses and the economy is still weak.

At the meeting, representatives of some banks said that the credit growth target set for this year is higher than last year. In the context of general difficulties, credit demand has declined, although the State Bank operates quite reasonably, lending interest rates have dropped deeply, and commercial banks have offered many incentive programs, disbursement still slow.

Regarding capital, banks currently have no shortage, but to inject capital into the economy and ensure credit growth goals, the problem is not only in the management of monetary and credit policies or credit room but also lies in the economy's ability to absorb capital. In the current context, all customer segments are affected, so credit disbursement is a difficult problem.

Commercial banks request competent authorities to continue researching and implementing more comprehensive solutions, especially resolving legal problems related to real estate projects, deploying solutions to stimulate domestic consumption, promoting disbursement of public investment capital, etc., thereby easing the flow of credit.

Source: VNA, SBV

Compiled by VBI

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