Vietnam PM meets top local businesses amid weak bank lending

By Thomson Reuters Mar 13, 2024 | 10:41 PM

HANOI (Reuters) – Vietnamese Prime Minister Pham Minh Chinh on Thursday met with the country’s top businesses to discuss measures to shore up economic activity amid weak bank lending, the government said.

Vietnam’s economic growth largely moves in tandem with credit growth. The central bank targets a credit growth of 15% for this year.

Banks’ total outstanding loans as of end-February fell 0.72% from the end of last year, the government said in a statement.

“The global economy in 2024 is expected to continue to face numerous headwinds,” Chinh told the meeting, attended by executives of the country’s top companies, including its largest conglomerate Vingroup, tech firm FPT and property developer No Va Land.

The Southeast Asian country, a regional manufacturing hub, reported gross domestic product growth of 5.05% last year, slowing from an expansion of 8.02% in 2022.

Deputy central bank governor Dao Minh Tu said at the meeting that weak global demand and inflationary pressure were among the reasons behind the weak credit growth.

The central bank, which cut its policy rates four times last year, would continue to work on measures to increase businesses’ accessibility to credit by further streamlining its legal frameworks and cutting banks’ operation costs, Tu said.

(Reporting by Khanh Vu; Editing by Kanupriya Kapoor)