Vietnam lending growth crawls to 1.6% as of April 23

Credit growth in the Vietnamese banking system reached 1.6% in the year to April 23, according to a government report.

The expansion was slower than a 2.66% increase in the same period last year, Deputy Prime Minister Le Minh Khai said in a report delivered to the ongoing National Assembly plenum on Monday.

Khai recognized that “credit growth has been slow”. In addition, the government is facing macroeconomic management pressure, especially in inflation control; the handling of interest rates, the foreign exchange rate, and highly volatile international and domestic gold prices.

Lending has been tepid since the start of this year, contracting 0.6% as of end-January and 0.72% as of February 29 against end-2023. Credit bounced back later and grew 1.34% in the year to March 29, according to central bank data.

Looking ahead, the government will strive to facilitate access to credit for businesses and citizens, and funnel lending into the real economy, priority sectors, and growth drivers.

It aims to achieve credit growth of 15% this year and cut lending interest rates by a further 1-2 percentage points, said the report.

In addition, the government will speed up the disbursement of a VND120 trillion ($4.7 billion) credit package for social housing, housing for workers, and renovation of old residential buildings.

A survey by the State Bank of Vietnam last month revealed that local credit institutions expected credit growth to come in at 3.8% in Q2/2024 and 13.6% for the whole year.