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Home  >>   Daily News  >>Vietnam>>Economy>>Credit growth expected to rise 16.33% in 2017
NEWS UPDATES Asean Affairs    July 7, 2017  












Credit growth expected to rise 16.33% in 2017

The total loans of the banking system are expected to grow by 16.33 per cent in 2017 against December last year, lower than the Government’s limit of 18 per cent.

The State Bank of Viet Nam released the information this week after conducting a survey on business performance trends of credit institutions in the second half of this year.

The survey also shows that credit institutions forecast the total capital mobilisation of the banking system to rise 16.02 per cent in 2017.

The General Statistics Office (GSO) has reported that credit growth in the first half of this year was 7.54 per cent, the highest in the past six years. The new record, considerably higher than the previous record of 6.28 per cent set in 2015, reflects the market’s significantly improved capacity to absorb capital, the GSO said.

Loans in the period were mainly focused on prioritised and large projects as instructed by the Government, accounting for roughly 50 per cent of total outstanding loans. Agriculture and rural industries, and small- and medium-sized firms received around 19 per cent and 22 per cent of the total outstanding loans, respectively.

Lending interest rates were 6-9 per cent per year for short-term loans, and 9-11 per cent per year for medium- and long-term loans. For customers with transparent finances, short-term lending rates ranged from 4-5 per cent per year.

The banking system’s capital mobilisation in H1 has risen by 5.89 per cent, and deposit interest rates have been relatively stable. Interest rates for đồng deposits were 4.5-5.4 per cent per year for short term, 5.4-6.5 per cent per year for medium term, and 6.4-7.2 per cent per year for long-term deposits.

The Government has targeted credit growth of 18 per cent for 2017, but at the National Assembly meeting recently, some deputies suggested that this limit be raised so as to support economic growth.

Analysts at Bảo Viet Securities (BVS) also recently forecast that the central bank may consider raising credit growth targets for several banks to aid economic growth.

The Government has been under intense pressure to loosen its monetary policy as the country is determined to meet its GDP growth target of 6.7 per cent for 2017. However, the fiscal policy has been struggling with disbursement of public investment, the BVS analysts said in a report. By end of May, disbursement of public investments had touched VNĐ88 trillion, equal to only 30.6 per cent of the entire year’s estimates.

The BVS analysts said when fiscal policy does not support growth well, pressure will intensify on monetary policy. Increasing credit growth targets of several banks may be an option worth considering, the analysts said.--VNS


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ASEAN  ANALYSIS

This year in Thailand-what next?


AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

 


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