Credit growth has resumed positive growth after a decline in July, promising the possibility of accelerating along with the economic growth momentum.

The State Bank of Vietnam (SBV) has just announced that credit growth data as of August 16 increased by 6.25% compared to the end of 2023, while previously as of the end of July, the total outstanding loans of the entire economy increased by 5.66%, lower than the figure recorded at the end of June at 6.1%.

Thus, after days of strong acceleration towards the end of June 2024 to achieve the Government's target of 6% for the first half of 2024, credit slowed down in July and has only recently recovered.

Previously, statistics from the State Bank of Vietnam as of the end of July recorded that cash flow into the economy decreased, outstanding loans to the industrial and construction sectors increased by 4.3%; to supporting industries increased by 9.8%; to high-tech industries increased by 18.16%; to real estate increased by 4.6% compared to the end of 2023 (of which, outstanding loans for real estate business increased by 10.3%).

In Ho Chi Minh City, outstanding loans in July decreased slightly by 0.09% compared to the previous month. According to Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Ho Chi Minh City Branch, outstanding loans in July decreased slightly, mainly due to short-term loans maturing and foreign currency loans decreasing.

Several experts believe that credit in the first half of August has increased, meaning that the capital absorption demand of economic sectors has strongly recovered.

Mr. Nguyen Duc Lenh shared that although outstanding loans have decreased, in general, with the socio-economic situation and business production activities of enterprises in the first half of the year, especially the economic growth driving sectors continuing to maintain a positive growth trend, this will be an important environmental factor to maintain and promote credit growth in the upcoming period.

A more favorable economic environment, low interest rates and the State Bank of Vietnam's loose monetary policy are believed to be factors affecting credit growth.

According to Deputy Governor of the State Bank of Vietnam Dao Minh Tu, in favorable economic conditions, capital demand for production and business activities will recover, and credit growth will be more positive. The State Bank of Vietnam leaders expect that credit growth of the banking sector this year can reach the high target of 15%.

Kylie Nguyen