The State Bank of Vietnam (SBV) should have specific consideration and calculation so as credit growth to be in line with economic growth target and to avoid causing economic instability, Vu Dinh Anh, financial specialist, said in an interview with the local newswire Lao Dong (Labourer) on August 16.
Regarding the question that from now until the end of this year, should the central bank (SBV) stimulate credit growth, according to Vu Dinh Anh, in the remaining five months of this year, the central bank will be unlikely reach the credit growth target of about 15-17 percent set in early this year. Even the credit growth target at about 8-10 percent this year, which the central bank has recently adjusted down, is still high.
If performing the credit growth target from 8-10 percent in a short time, the credit disbursement will be turbulent, which could easily result in the recklessness in credit contracts and increase credit risks and bad debts in the future, coupled with high inflation risk and macroeconomic instability.
The question is why should we speed up credit growth? If making an average calculation in recent years, the credit growth rate has reached about 30%/year, bringing the total credit to over 100 percent of GDP. Credit growth is too high while credit efficiency is not high together with the use of investment capital is not as expected, greater social investment while economic growth is not as expected, which is the root leading to inflation.
When inflation is down, if the central bank is not careful in handling the credit growth, it is likely that high inflation will return in the fourth quarter 2012, then the central bank would be forced to return to the tight credit policy, the consequences would be worse.
Therefore, the central bank should have specific consideration and calculation so as credit growth to be in line with economic growth target, but it must be based on efficiency and ensure the major balances of the economy to avoid causing any macroeconomic stability.