The State Bank of Vietnam (SBV)’s credit growth target set at about 14 percent, equalling to 2018, is completely reasonable and achievable, according to economic experts.
Economist Dinh Trong Thinh, senior lecturer of the Academy of Finance, said that with the current trend, credit growth in 2019 should be in the range of 12.5 percent to 14 percent, it should not be too high. Because the capital mobilisation for production and business enterprises and the economy will mainly grow thanks to capital mobilisation, additional shares or bond capital from the stock market.
According to Nguyen Duc Thanh, director of the Institute of Economic and Policy Research, University of Economics (Hanoi National University), the stable credit growth trend in 2018 will continue in 2019 because of Vietnam’s good economic growth and low intensive capital in the economy, so there is no reason to increase credit in 2019.
Nguyen Duc Thanh also said that in the past, the domestic economic growth depended heavily on bank credit, but now, the economic structure has been better. Supporting industries, services and agriculture have developed and attracted foreign investments. When credit use improves, there should be a better credit growth policy in the long term. “I think credit growth in the range of 14-15 percent is reasonable,” Thanh said.
In the banking industry’s prospectus report in 2019, Bao Viet Securities Joint Stock Co (BVSC) forecasts that credit growth in the next 35 years will be maintained at about 14 percent/ year, lower than that of 20152017 period (average 18.1 percent), comes from both credit supply and demand.
BVSC’s report forecasts that economic growth in 2019 will slow down at 6.46.5 percent. Economic growth will slow down in line with the businesses demand for loans to expand production and business that can slow down. Interest rates forecast to increase by 0.25 percent0.5 percent in 2019 will also affect customer’s demand for loans.
On the other hand, credit supply will also slow down due to the impact of the new policy issued by the central bank, such as the “tightening” of real estate credit through the regulation of raising the risk coefficient for real estate loans to 200 percent in early 2018 and 250 percent in early 2019, while reducing the ratio of short-term capital for medium and long-term loans to 40 percent from early 2019.
From these forecasts, BVSC believes that the estimated capital demand to meet the credit growth of 14-15 percent/ year in listed banks in 20182019 is about 237 trillion dong; in which, the biggest capital demand is concentrated in banks such as VietinBank, LienVietPostBank and Sacombank with an annual average increase of 22 percent, 16 percent and 13 percent per year.
According to SBV’s deputy Governor, Nguyen Thi Hong, in 2019, implementing the Resolution No. 01/NQ-CP of the government on the main tasks of implementing socio-economic development plans and state budget estimates in 2019, the central bank set a credit growth target at about 14 percent, equivalent to 2018. In particular, credit will still be focused on prioritised areas, ensuring risk control and supporting economic growth.
The cenral bank has also implemented some key solutions to contribute to the achievement of economic growth targets in 2019.
