Credit growth forecast to slow to 9-10 percent in 2020
Credit growth would likely reach only 9-10 percent this year against 13 percent last year even if the country’s infrastructure investment was good, experts forecast.
Hanoi (VNS/VNA) - Credit growth would likely reach only 9-10 percent this yearagainst 13 percent last year even if the country’s infrastructure investmentwas good, experts forecast.
Thegrowth rate would be lower than the central bank’s 11-14 percent targeted forthis year.
Accordingto experts from Yuanta Securities Company, the central bank’s second interestrate cut of 0.5 percentage points recently might not really boost creditdemands of firms.
Thereduction has a more positive impact on the banking system and might affect theeconomy more strongly than the first rate cut in March. Accordingly, a seriesof input interest rates offered by banks, especially the short-termdeposit interest rates, which are lower than in previous periods, will helpbanks reduce deposit costs significantly and support businesses to extend theirdebt and restructure loans.
However,under the current context, instead of interest rates, firms are caring moreabout whether the COVID-19 pandemic will be controlled, especially in countriesthat have significant trade balance with Vietnam, such as the US, EU, China andJapan, according to the experts.
Ifconsumption demands are still limited, firms will not borrow even if interestrates are low and banks must also be very cautious in disbursement because ofbad debt concerns, the experts explained.
Asinvestment in infrastructure increases, credit in industry and construction isforecast to rise higher compared with the last two years./.
Major banks are still expecting to report growth in the first quarter and for the rest of 2020 despite the disruptions caused by the COVID-19 pandemic.
Vietnam’s credit growth is forecast to slow to only 8 percent in 2020 from 13.7 percent last year due to a sharp slowdown in economic activity amid the COVID-19 pandemic.
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Commercial banks cut interest rates on 980 trillion VND (42.6 billion USD) worth of loans to support 318,000 COVID-19 affected individual and corporate borrowers by the end of April, the latest data from the State Bank of Vietnam (SBV) showed.
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A transaction office of BIDV (Photo: VNA) 
