Vietnam State Bank struggles to help economy and curb inflation
VIETNAM’S central bank is facing pressure to jump-start the economy amid continuing slow growth of bank loans while also ensuring inflation remains in check, State Bank governor Nguyen Thi Hong told lawmakers during a national broadcast of parliament on Wednesday (Nov 1).
The nation’s bank credit growth as at Oct 27 was at 7.1 per cent from the end of last year, Hong said. That’s well below the government’s 2023 loan growth target of 14 per cent to 15 per cent.
“Our policies need to respond to immediate developments, but must also give fundamental solutions for the medium- and long-term period,” she said. “Only then can we ensure macroeconomic balances in a sustainable way.”
Vietnam’s export-reliant economy is expected to grow about 5 per cent this year, down from the government’s 2023 gross domestic product target of 6.5 per cent.
Prime Minister Pham Minh Chinh, in his address to the National Assembly last week, said the global economy continues to be “complicated and unpredictable” and is weighing on the nation’s factories that ship everything from sneakers to smartphones across the globe.
The regulator continues to put in place policies to boost lending while ensuring liquidity in the banking system, Hong said. It has also implemented measures to reduce lending interest rates for new loans by about 2 percentage points from the end of last year, Hong said.
The State Bank has organised numerous meetings, conferences and seminars across the country to improve links between businesses and banks, she said. About 95 per cent of Vietnamese companies are small and medium businesses.
The central bank continues to direct lenders to cut administrative costs and procedures to enable faster distribution of loans, Hong added. BLOOMBERG
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