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The SBV affirmed closely following the resolutions of the National Assembly and the directives of the Government and the Prime Minister. It administers monetary policies with certainty, proactivity, flexibility, effectiveness, and coordinated alignment with fiscal policies and other macroeconomic policies to control inflation and contribute to the stability of the macroeconomy, supporting reasonable economic growth.
The adjustment of the credit growth target for CIs is based on proposals from the CIs, considering their performance, financial capacity, management, and ability to expand healthy credit, ensuring liquidity and safe operations within the CI system.
As of June 30, outstanding credit in the economy reached over 12.4 quadrillion dong, an increase of 4.73% compared to the end of 2022. At the beginning of 2023, based on the economic growth and inflation targets set by the National Assembly and the Government, the SBV had initially planned for a credit growth target of approximately 14%-15% for 2023, with appropriate adjustments according to the actual situation.
In the context of the lower-than-expected economic growth in the first six months of the year and the difficulties in financial capital sources, the SBV has been implementing the Government and the Prime Minister's directives to address production and business challenges, stabilize the macro economy, and promote growth. In parallel with implementing a series of coherent monetary policy measures and tools, the SBV adjusted the credit growth target for credit institutions to provide additional credit capital to promptly meet the economy's demands while being cautious about inflationary risks.
The adjustment of the credit growth target for credit institutions by the SBV is based on the proposals of these institutions, their performance, financial capacity, management, and the ability to expand healthy credit, ensuring liquidity and safe operations within the credit system.
Alongside the adjustment of the 2023 credit growth target for credit institutions to approximately 14%, the SBV continued to demand that CIs seriously implement Directive No. 01/CT-NHNN dated January 17, 2023, issued by the Governor of the SBV regarding the key tasks of the banking industry in 2023; vigorously implement measures to promote safe and effective credit growth, enhance the credit quality, direct credit towards production and business sectors, prioritize areas, and growth drivers in line with the Government's policies, responding promptly to the capital needs of individuals and enterprises.
Speeding up the revisal of administrative procedures, simplifying and shortening loan processes, and ensuring compliance with legal regulations to facilitate customers' access to bank credit, therefore actively supporting businesses and individuals in resuming production and business activities and ensuring the safe operations of credit institutions.
In the upcoming time, the SBV will closely monitor both domestic and international market developments, ready to support liquidity and create favorable conditions for credit institutions to provide credit to the economy. At the same time, the SBV will review the credit growth situation throughout the system in the last months of the year to implement appropriate management measures.
From the beginning of the year until now, the SBV has managed monetary policies to maintain ample liquidity, providing capital for economic recovery and development. They have continually adjusted interest rates four times, issued regulations on restructuring debt terms while maintaining debt categories, and directed credit institutions to simplify loan procedures. According to the SBV, these monetary policy operations have facilitated customers' access to bank credit, controlled inflation, maintained ample liquidity, and stabilized the money and foreign exchange markets.
According to experts, the SBV’s credit growth target of 14% instead of the projected 14%-15% is due to lower-than-expected credit growth results and expectations. Although credit institutions have implemented many interest rate reduction programs, credit growth has been relatively slow, partly due to low credit demand.
Experts predict that credit growth will slow down and may only reach around 12% in 2023 due to the unfavorable real estate market, deceleration in export growth, and difficulties in production.
According to a recent survey on the business trends in the third quarter conducted by the SBV functional department from May 25, 2023, to June 10, 2023, among credit institutions, it was found that customer demands for loans, payment, and card services, and deposits improved in the second quarter of 2023. However, the proportion of credit institutions perceiving "improvement" was lower than the previous survey.
The surveyed credit institutions anticipate that the credit system's outstanding loans are expected to increase by 4.4% in the third quarter of 2023 and by 12.5% for the entire year 2023, which is a decrease compared to the previous survey.
Department of Research and International Cooperation
