Despite low credit growth in the first 6 months of 2014, the State Bank of Vietnam (SBV)’s Governor is still confident that the year’s growth rate target of 12-14% is achievable, local newswire Infornet reported.
By the end of June 2014, credit grew 3.52% from the end of 2013, in which foreign currency surged by 12.03% in and VND credit rose by 2.17%.
The SBV attributed the slow growth to some reasons: Capital absorption capacity of the economy is still weak, budget arrears and problems in handling collaterals haven’t been completely handled and guaranteeing mechanism for business loans hasn’t been promoted.
On the positive side, the credit structure continued to shift towards focusing on the priority areas of Government policy. It is estimated that, by the end of June 2014, credit for exports grew 10%, for supporting industries grew 5.8%, for enterprises applying high technology grew 13%, for small and medium enterprises grew 2% compared with end of 2013. By the end of May, agricultural and rural credit is estimated increase of 2.56% from the end of 2013.
As of June 30, 2014, total means of payment rose 7.29% compared to the end of 2013, in line with the target of increasing 16-18% in 2014.
In the second half of 2014, the Governor said that monetary policy works will face many challenges. However, as a rule, credit growth in the second half of the year often doubles that of the first half. In addition, bad debts will also be the focus that the central bank will work on in late 2014.
"Therefore, the growth of over 10% is certainly achievable in 2014," Binh said.
Source StoxPlus