Good control of pandemic will accelerate credit growth: Insiders
Credit growth will expand significantly from Quarter 2 and exceed the State Bank of Vietnam (SBV)’s target of 12 percent for the year as a whole if the pandemic is brought under good control and the vaccination campaign proves effective, according to insiders.
Hanoi (VNA) - Credit growth will expand significantly from Quarter 2and exceed the State Bank of Vietnam (SBV)’s target of 12 percent for the year asa whole if the pandemic is brought under good control and the vaccination campaignproves effective, according to insiders.
Expecting domestic recovery in its strategicinvestment report for 2021, the VNDirect Securities Corporation forecast that this year creditgrowth would top 13 percent and interest rates could fall 20-50 percentage points in thecontext of loose monetary policy and low inflationary pressure.
According to Can Van Luc, BIDV chief economist, 10-15 percent growth issuitable, given that risks await commercial banks in the time ahead despite theeconomic recovery.
Potential bad debts are on the rise, which will eat into the bank’s profit, he stressed.
Meanwhile, the SBV’s Department of Credit for Economic Sectors forecast strongcredit growth from Quarter 2, which could be higher than the SBV’s target of 12 percent, especiallyin the fields of industrial production, exports, trade and tourism.
Good domestic consumption, rosy exports, strong FDI attraction anddisbursement of public investment will drive credit growth, it said.
Head of the department Nguyen Tuan Anh revealed that as of the end of March,credit growth was up by 2.3 percent compared to the end of 2020 and higher thanthe figure in the same period last year, when credit growth in the economy inchedup less than 1 percent.
From the outset of this year, the SBV was prudent in assigning credit growth forcommercial banks, Anh said, adding that it outlined three scenarios for creditgrowth this year, with the maximum reaching 14 percent if COVID-19 was wipedout in Quarter 1, 10-12 percent if the pandemic lasts until June and socialdistancing measures are put in place, and 7-8 percent if it lasts until the endof the year.
According to economist Nguyen Tri Hieu, it is necessary to stimulate credit demandto achieve effective credit growth. However, banks should be able to controltheir customers’ sources in covering debts to ensure credit growth criteria andthe quality of collateral./.
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Illustrative image (Photo: VNA) 
