First six months credit growth is estimated to have edged up only 0.4pct over the beginning of the year which is much beyond expectation. The root cause has been enterprises’ weak capital absorption capacity and soaring bad debts, according to the National Financial Supervisory Committee. Therefore, this year’s credit growth could climb merely 8pct rather than 15pct-17pct, predicted this agency.
Improved banking liquidity accompanied by decreasing interest rates and stable foreign exchange rates over the recent times have enabled foreign reserves to jump 30pct over the early year. Balance of international payments are estimated to enjoy USD 7.5 billion in excess in the first half thanks to improved balance of trade.
Given the projected credit growth rate of 8pct, medium and long-term capital for the economy could plunge by 80 trillion dong. Should fiscal and monetary policies are combined; this year’s GDP growth is anticipated to have reached 5.3pct-5.6pct, much lower than the target of 6.5pct. This agency also predicted inflation to stand at some 6pct at the year end.
Regarding the government’s Resolution 13 on easing burdens on enterprises, this agency assumed the modest funds for demand stimulus to be the major shortcoming. Pending projects that are funded by the state budget have enjoyed bailout worth of merely some 2 trillion dong. Additionally, value added tax extension is estimated to touch some 12 trillion dong or 0.5pct of the economy’s outstanding credit, which may, therefore, fail to much assist enterprises.
This committee reckoned monthly investment capital to be maintained between 80 trillion dong and 85 trillion dong so as to stabilise medium and long term macro economy.