Clients make transtraction at the HDBank branch in Hà Nội. VNA/VNS Photo Trần Việt

 HÀ NỘI — Credit growth will expand significantly from the second quarter and exceed the State Bank of Vietnam (SBV)’s target of 12 per cent for the year as a whole if the pandemic is brought under control and the vaccination campaign proves effective, according to insiders.

Regarding domestic recovery in its strategic investment report for 2021, the VNDirect Securities Corporation forecast that this year's credit growth would top 13 per cent and interest rates could fall 20-50 percentage points in the context of loose monetary policy and low inflationary pressure.

According to Cấn Văn Lực, BIDV chief economist, 10-15 per cent growth is suitable, given that risks await commercial banks despite the economic recovery.

Potential bad debts are on the rise, which will eat into banks' profits.

Meanwhile, the SBV’s Department of Credit for Economic Sectors has forecast strong credit growth from the second quarter, which could be higher than the SBV’s target of 12 per cent, especially in the fields of industrial production, exports, trade and tourism.

Good domestic consumption, rosy exports, strong FDI attraction and disbursement of public investment will drive credit growth.

Head of the department Nguyễn Tuấn Anh revealed that as of the end of March, credit growth was up by 2.3 per cent compared to the end of 2020 and higher than the figure in the same period last year, when credit growth in the economy inched up less than 1 per cent.

From the outset of this year, the SBV was prudent in assigning credit growth for commercial banks, Anh said, adding that it outlined three scenarios for credit growth this year, with the maximum reaching 14 per cent if COVID-19 was wiped out in the first quarter, 10-12 per cent if the pandemic lasts until June and social distancing measures are put in place, and 7-8 per cent if it lasts until the end of the year.

According to economist Nguyễn Trí Hiếu, it is necessary to stimulate credit demand to achieve effective credit growth. However, banks should be able to control their customers’ sources in covering debts to ensure credit growth criteria and the quality of collateral.— VNS