According to the State Bank, as of March 25, 2024, credit to the economy reached about VND 13.6 million billion, an increase of 0.26% compared to the end of 2023.

On March 28, Deputy Prime Minister Le Minh Khai chaired the plenary meeting of the National Advisory Council for Monetary Policies. Attending the meeting were Ms. Nguyen Thi Hong - Governor of the State Bank of Vietnam, Standing Vice Chairman of the Council and other Council members and experts.

Reporting at the conference, representative of the State Bank said that as of March 25, 2024, credit to the economy reached about VND 13.6 million billion, an increase of 0.26% compared to the end of 2023 (in March alone, credit increased by 0.98%).

According to the State Bank, credit growth was low at the beginning of the year mainly due to seasonal factors during the Lunar New Year and low capital absorption capacity, but recovered in March. The State Bank continues to direct credit institutions to restructure repayment terms, keep the debt group according to Circular 02 and is reviewing to revise, supplement and extend the Circular; continue to implement credit programs and policies for priority areas and growth drivers such as the VND 120,000 billion credit program, loan program for forestry and fisheries sectors, etc.

Previously, credit growth was negative in the first 2 months of the year. State Bank data shows that as of February 29, 2024, credit to the economy decreased by 0.72% compared to the end of 2023. However, the rate of decrease in February slowed down (-0.05%) compared to January (-0.6%).

Low credit growth in the first months of the year is not too unusual as the average credit growth in the first two months of the 2013 - 2023 period is only 0.56%. Historical data shows that negative credit growth in the first two months of the year occurred in 2014 and 2018.

Sharing at the regular Government Press Conference in February, Deputy Governor of the State Bank of Vietnam Pham Thanh Ha said that in the first two months of 2024, credit growth was slower than the same period of other years, given the fact that liquidity is abundant but credit growth is slow compared to the same period of years.

"The general cause is due to seasonal factors after December's credit growth was very strong at about 4%," said the Deputy Governor.

Kylie Nguyen