Pham Thanh HaMonetary Policy Department said that the State Bank of Vietnam (SBV) continued to monitor and did not see any factors to adjust the credit growth target this year.
At the Banking Industry Overview Forum 2019 on May 8, Ha said that in the first four months, credit increased by five percent, equivalent to the growth of the same period last year.
According to data from SBV, in Q1/2019, credit for industries climbed by 2.57 percent (accounting for 19.99 percent). In more detail, credit for processing and manufacturing industry increased by 2.79 percent; credit for construction industry went up by 1.08 percent (accounting for 9.63 percent); credit for trade and service sector up by 1.97 percent (accounting for 61.21 percent); and credit for agriculture, forestry and fishery sector up by 1.01 percent (accounting for 9.17 percent).
In addition, credit flowing into priority areas also accelerated. Specifically, credit for supporting industry increased by 3.44 percent; credit for export sector increased by 5.4 percent; credit for high-tech application enterprises increased by 2.79 percent and credit for agriculture and rural areas increased by 2.23 percent. However, credit for small and medium enterprises decreased by 1.64 percent compared to the end of 2018.
SBV believes that the growth of the bank’s capital flowing into priority areas is higher than the overall credit growth of the economy.
However, Nguyen Xuan ThanhFulbright Programme director said that SBV need to be cautious with the amount of capital pumped into the market. ” With potential inflation, possibility of increasing oil prices, trade conflicts between major countries, trade protection trends, changes in monetary policy of other countries, fiscal space using monetary policy to support growth is limited. It is necessary to be careful to avoid overheating, especially the property market”, Thanh emphasized.
With the same opinion, Dr CAN Van Luc, finance and banking expert, said that the credit growth pressure was not too strong when the credit to GDP ratio was currently quite high (130 percent). In particular, the International Monetary Fund (IMF) had also proposed a more cautious request for credit growth, especially when capital raising activities of banks were still limited. “Credit has increased continuously but capital has not increased accordingly. Therefore, meeting Basell II standard is extremely difficult for many credit institutions today, ” Luc emphasized.
