Vietnam’s Credit Growth Touches 6-year High, Outstripping Deposit Expansion

Tuan Minh

16:58 29/06/2017

BizLIVE - Faster credit expansion has contributed to the acceleration of the country's economic growth.

Vietnam’s Credit Growth Touches 6-year High, Outstripping Deposit Expansion

Vietnam's credit growth in the first half of each year.

Total outstanding in the Vietnamese banking system grew 7.54% in the first six months of this year from the end of 2016, hitting a six-year high, the General Statistics Office (GSO) said in a report on Thursday.
“[This] indicates that enterprises’ capital absorption capacity and banks’ earnings from interests have improved significantly,” the government-run office added.
Lending far outpaced the money supply, which increased 5.69% in the six-month period. Deposits at banks, meanwhile, rose 5.89% from end-2016, compared to an expansion of 8.23% in the same period of 2016.
According to the office, annual interest rates commonly range between 6% and 9% for short-term loans and 9%-11% for long-term loans. The rates are higher than those in many regional countries.
Together with a recovery of agricultural production and the service sector, faster credit growth helped Vietnam’s GDP growth accelerate to 6.17% in the second quarter of this year from 5.15% in the first quarter.

TUAN MINH

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