Vietnam 2011 credit growth at 10.9 yr/yr -Central bank

by lexie Wed Jan 18, 2012 6:09 pm

January 18, 2012

Vietnam 2011 credit growth at 10.9 yr/yr -Central bank

Total outstanding loans in Vietnam's banking system grew an estimated 10.9 percent last year from 2010, the lowest annual rate of credit growth in two decades, the central bank said on Wednesday.

Meanwhile, deposits likely rose 9.89 percent from 2010 and the money supply expanded an estimated 9.27 percent, the State Bank of Vietnam said in a monthly report.

The central bank has "strict supervision of each bank's credit growth and its loans to non-production businesses", the statement said.

Soaring credit growth in recent years has stoked inflation in Vietnam, which rose to 23 percent in August last year before abating, ending the year at more than 18 percent.

The credit growth of 10.9 percent was well below a target of 15-17 percent, which had been cut from under 20 percent initially targeted as the authorities stepped up efforts to control inflation.

In 2010 credit growth was 27.65 percent and the year before it was nearly 37.7 percent - levels that economists said were dangerously high. In 2007, credit growth was 53.8 percent.

The State Bank of Vietnam is targeting credit expansion target of 15-17 percent this year and a 14-16 percent increase in the money supply, but governor Nguyen Van Binh said in December lending growth could stay below 15 percent.

The government has said its priority for this year will be containing inflation pressures, ensuring macroeconomic stability and restructuring the economy.

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