Slow Credit Growth Likely Hurt Vietnam Economy: Economist
Total dong loans of Vietnam’s banks expanded slowly at 4.6% in the first half of this year, said Chairman of the National Financial Supervisory Committee Le Duc Thuy, warning that the trend may hold back the country’s economic growth this year.
Slow lending, caused by high borrowing costs, has prevented local enterprises from boosting investment and production, Thuy said at an investment conference in Ho Chi Minh City.
He added that lending rates were still high and many small- and medium-sized enterprises can not access loans to invest in their projects. Investments by private sector rose only 9% on-year in the period.
Thuy, who is the former Governor of the State Bank of Vietnam, urged the central bank to tackle monetary policy issues and ensure liquidity for the banking system and the economy to help the country attain its targeted economic growth of 6.5% this year.
At the meeting, Dam Bich Thuy, Chief Executive Officer of ANZ Vietnam, said interest rates would tend to fall in coming months as pressure on inflation is over.
A government data showed that Vietnam’s consumer price index in June rose 0.22% from May and 8.75% from a year earlier, the lowest increase in the last six years, she noted.
Vietnam’s economy grew 6.16% on-year in H1 and is projected to expand between 6.5% and 6.8% in 2010 while the whole-year CPI is expected to be curbed at below 8%. (CafeF, VNS)
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