Given the 15% credit growth target set for this year, it is estimated that an additional VND2,000 trillion (US$82.03 billion) would be injected into the economy.

Deputy Governor of the State Bank of Vietnam Dao Minh Tu. Photos: Nhat Bac/VGP

Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu revealed the figures at a Government press briefing on January 5.

Tu added that as of December 31, 2023, credit growth reached 13.71%, below the annual target of 14-15%. Approximately VND1,300 trillion ($53.3 billion) was injected into the economy last year.

Data from the SBV in early December 2023 showed a 9.15% credit growth. Consequently, within a month, the economic credit outstanding surged by 4.56%. This resulted in the economy’s credit outstanding balance of VND13,500 trillion ($553.7 billion) by the end of 2023.

The credit growth target for 2024 set by the monetary authorities is 15%, which is allocated to banks at the beginning of the year.

He emphasized that providing banks with the full credit room at the start of the year is a proactive measure in management, as opposed to the previous practice of staggering credit disbursement. According to Tu, this approach will empower banks to proactively allocate capital to the economy.

He further stated that given the favorable economic conditions in the middle and end of the current year, the SBV will allocate additional credit room to banks with strong financial health, facilitating access to capital for individuals and businesses.

In the second half of December 2023, the market witnessed a race among banks to offer loans, with strategies such as 0% interest rates or unsecured loans through credit cards to attract borrowers aiming to achieve the highest credit growth target.

This year, the SBV indicated a reduction in interest rates is expected to lead to better credit performance than in 2023.

“The authorities plan to actively and flexibly manage credit in line with macroeconomic trends, inflation, and directing capital towards priority areas such as investment, consumption, and exports,” said Tu.

Deputy Minister of Finance Nguyen Duc Chi.

Eyeing stock market upgrade by 2025

Regarding the stock market, at a press conference, Deputy Minister of Finance Nguyen Duc Chi revealed that there are currently over seven million securities accounts. The market capitalization stands at VND6,000 trillion ($246 billion), a 9.5% increase compared to 2022, equivalent to 62% of the GDP in 2022.

Chi noted that several measures were taken in 2023 to restructure the market, filter weak securities companies, and manage poorly performing funds.

“The ministry took action against six securities firms, placed one under control, and issued warnings to two others,” Chi informed.

He expressed his belief that the stock market is a touchstone reflecting the quality of the economy. With solutions to ensure sustainable macroeconomic balance and stable growth this year, he expected a solid foundation for the stock market's positive development.

"The Ministry of Finance is committed to maintaining a safe market operation, ensuring transparency, and safeguarding the legal rights of investors," Chi emphasized.

According to the 2030 stock market development strategy, the Government aims to upgrade the market from its current frontier market status to an emerging one by 2025.

Chi mentioned that this year, the Government will actively implement measures to achieve the standards for upgrading the Vietnamese stock market.