PM urges banks’ credit to run into key economic sectors

Banks are expected to focus their lending on key economic fields that serve as growth engines, including investment, export, and consumption.

Overview of the meeting. Source: VGP

Prime Minister Pham Minh Chinh gave the remarks during a Government meeting on December 6, discussing monetary-fiscal policies during the remainder of the year.

In a related move, the State Bank of Vietnam (SBV), on the previous day, expanded the credit growth target for 2022 from 14% to a maximum of 16% amid the rising demand for capital in the economy. An expansion of the credit room by 1.5-2 percentage points would result in around VND200 trillion ($8.36 billion) being pumped into the economy, in turn providing the much-needed capital for businesses and people looking to take advantage of a thriving economy.

This year, Vietnam’s GDP growth is on track to hit 8% year on year, 1.5 percentage points higher than the target set by the National Assembly and remains among the world’s fastest-growing economies amid a dim global outlook.

The prime minister, however, requested the banking sector to ensure liquidity and stability, especially in finding a balance to support growth and contain inflation at the same time.

Chinh also suggested banks continue providing loans to qualified real estate projects and buyers of social houses.

Looking back at the socio-economic performance in the past 11 months, Chinh said the global uncertainties continue to be a major challenge for Vietnam’s economy, not to mention businesses and people continue to struggle with the Covid-19 impacts.

“A strong economy would be beneficial to the banking sector. So in a period of the economic downtown, banks should share difficulties with the businesses and people,” Chinh said, expecting banks to continue providing preferential loans and restructuring customer debt payments.

Chinh added that while the Government’s recent measures to restore order in the capital market may have negatively impacted investors’ sentiment, it would bring benefits in the long term to ensure the healthy development of all markets and the lawful rights of parties involved.

He referred to the positive signs on the stock market as the benchmark Vn-Index made an impressive recovery by gaining over 100 points last week. In addition, the setup of the Government’s taskforces to address issues in the corporate bond and real estate markets is expected to improve the situation, he continued.

As part of long-term solutions, Chinh assigned Deputy Prime Minister Le Minh Khai to lead the efforts of amending multiple decrees overseeing the operation of the securities, bond, and real estate markets.

The Ministry of Construction and the Government’s task force must continue summarizing issues and concerns in the real estate market and report to the prime minister to revise regulations if needed.

Chinh asked the Ministry of Industry and Trade to prevent a shortage of petrol products for domestic consumption, while the Ministry of Labor-Invalids and Social Affairs should closely monitor the labor market and avoid the risk of disruption of the labor supply chain.