According to the Resolution of the Government's regular meeting in September 2017, the State Bank is assigned to continue actively and flexibly monitor monetary policy in line with macroeconomic developments, inflation status and monetary market, striving to further reduce the lending rates and by 0.5 per cent by the end of 2017 strive for an annual credit growth rate of 21 per cent to boost production and business.
It is also assigned to intensify credit capital in priority fields, create favorable conditions for small and medium-sized enterprises to get access to credit loans. Besides, poor-performing credit institutions must be restructured during the 2016-2020 period in association with substantial bad debt settlement within the implementation of the overall scheme on national economic restructuring.
Earlier, General Statistics Office of Vietnam revealed that the economic credit growth in first nine months of 2017 was just 11 per cent. Also, National Financial Supervisory Commission (NFSC) experts said that credit rose by 12.9 per cent with corporate bonds being added. Meanwhile, according to Monetary Forecasting and Statistics Department of SBV, banks expected that credit growth in Q4 2017 and the whole year will reach 6 per cent and 17 per cent, respectively.
Although the 11 per cent of credit growth in 9M 2017 is much lower than the 21 per cent target set for the whole year, it is still expected to be reached based on the history of loans over the years. Specifically, credit growth in 9M 2016 was just 11.64 per cent while the figure for the whole year was 18.25 per cent. It is estimated that the economy was injected VND303,000 billion (roughly US$13.36 billion) of capital in last three months of 2016.
After 9M 2017, credit growth reached VND6,100 trillion (roughly US$269 billion). In order to achieve the credit growth of 21 per cent, an additional amount of VND550 trillion (roughly US$24.25 billion) must be injected into the economy, especially the priority fields.
However, many international credit institutions like HSBC Bank, Asia Development Bank have warned that the rapid increase in credit growth could detrimentally impact on Vietnam economy, especially leading to major risks related to fiscal deficits, budgets, and credit quality.