Vietnam’s economy is likely to expand more than 5.3% in 2012 if credit growth rises over 6%, said the National Financial Supervisory Commission (NFSC).
Given that the government has approved to cut and suspend taxes to spur economic activities and speed up disbursement of state budget-funds to raise gross demand, the NFSC almost ruled out the possibility of the scenario that Vietnam economy will growth under 5% this year.
The key to economic expansion this year lies in credit growth, NFSC commented, adding that “in the context that there have not been any clear solutions for non-performing loans, the possibility of removing the credit knots in the next months will be very difficult. With gross demand showed signs of bottoming, credit growth will rise in the last months of the year but will not surpass 8% this year”.
Despite the State Bank of Vietnam (SBV), the country’s central bank, efforts to clear the credit flows, help business better access bank loans, credit growth fell 0.1% in the year to July 25, the NFSC said.
The NFSC also gave out other economic indicators in the first seven months of this year including IIP rose 4.8%, lower than 8.8% in the same period last year; total retail sales and services rose 6.74%; state budget collection reached 47.4% from domestic sources and 38.3% from import-export activities; FDI rose 17% on year and FII rose over 40% on year, exchange rate stable under VND21,000 a dollar, within 1% of the midpoint rate, overnight interbank interest rates were stable at 3-4%.