Banks in Vietnam pump $23.8 bln into national economy in Q1

The Vietnamese banking system injected nearly VND614 trillion ($23.8 billion) into the economy in the first quarter of the year, according to State Bank of Vietnam Governor Nguyen Thi Hong.

The credit balance of the entire economy at the end of Q1 reached VND16,230 trillion ($629 billion), Hong told a regular cabinet meeting on Sunday.

At the end of March, credit growth reached 3.93% against the end of last year, 2.5 times higher than the 1.42% expansion in the same period last year.

Previously, the central bank's (SBV) data showed that by March 25, credit had grown by about 2.5% compared to the end of 2024.

This meant within the last week of March, the total credit balance grew by 1.43%, or over VND223.3 trillion ($8.66 billion).

The Governor noted that this development reflects the banking system's positive contribution to the society's total investment in recent times.

"In the coming time, if inflation remains controlled at low levels, there could be flexible adjustments to the credit growth target to support economic expansion," she told the meeting.

In 2025, the central bank aims for the system's credit growth of 16% or even higher if conditions allow.

On December 30, 2024, the SBV sent a document to credit institutions, informing them of principles regarding credit growth allocation for 2025, which enabled them to deploy plans on capital supply to the economy right from the start of the year.

The central bank has continued to implement a roadmap to limit and eventually eliminate the allocation of credit growth quotas for credit institutions, per the National Assembly’s Resolution No. 62/2022/QH15 dated June 16, 2022.

It has also allowed foreign banks, joint venture banks, cooperative banks, and non-bank credit institutions to proactively manage credit growth for 2025.

In addition, the SBV has required credit institutions to ensure safe and effective credit growth, maintain credit quality, and limit bad debt accumulation.

They must ensure that credit is directed to priority sectors and economic drivers, in line with the government's policy, while tightening control over credit to sectors with potential risks, it stated.

In 2024, Vietnam's credit growth reached 15.08%, with total credit balance of VND15,616 trillion ($605.3 billion) by the end of the year.