Credit growth in the first quarter was 2.5 times higher than the same period last year, contributing positively to social investment.

Governor Nguyen Thi Hong speaks at the regular Government meeting in March 2025 - Photo: Nhat Bac

Analyzing the world economic situation in the first quarter, the Governor assessed that global growth slowed down and inflation risks increased due to global trade tensions. After the US President announced the tax, JP Morgan predicted that US inflation could increase by 1.5%. Accordingly, the Fed's interest rate reduction roadmap slowed down and world monetary policy is diverging. Some central banks have temporarily stopped cutting interest rates and when the US imposed taxes, some major trading partners also announced retaliatory tariffs. This will certainly complicate fluctuations in world and domestic monetary and financial markets, creating pressure on monetary policy management, exchange rates, interest rates as well as the implementation of the economic growth target of 8% or more by 2025.

Domestically, the economy had positive developments in the first quarter. Total retail sales of goods and services increased by 6.2%, higher than the same period last year. Total social investment also grew by 8.3%, exceeding the 5.5% of the previous year, showing improvement in these two important pillars. This helped GDP in the first quarter increase by 6.93% - the highest level since the first quarter of 2020. However, compared to the growth target of 8% or more, a lot of effort is needed.

Regarding monetary policy management, for credit, from the beginning of 2025, the State Bank has assigned a credit target of 16% and notified all credit institutions to be proactive in this activity. By the end of the first quarter, credit growth reached 3.93%, 2.5 times higher than the 1.42% in the same period last year, showing the positive contribution of the banking sector to total social investment in the recent past.

"In the coming time, the State Bank will continue to monitor and if inflation is controlled at a low level, it can flexibly adjust credit growth to promote economic growth," the Governor said.

Regarding interest rates, the Governor said that after some commercial banks increased their deposit interest rates, the State Bank held a meeting and then the banks adjusted them down. Thanks to that, lending interest rates have continued to decrease by 0.4% compared to the end of 2024, demonstrating the banking system's efforts to support the economy.

Overview of the meeting - Photo: Nhat Bac

Regarding exchange rates, the Governor of the State Bank of Vietnam said that this is an issue that all businesses are very concerned about after President Donald Trump announced the tax decree. The State Bank of Vietnam has closely followed President Trump's tax decree and noticed the difference compared to previous times. Specifically, this time the tax is based on the trade surplus of 57 countries, without clearly mentioning the currency issue. The State Bank of Vietnam found that the trade solutions proposed from the meetings of the Government and the Prime Minister are very consistent with the spirit of President Trump.

Governor Nguyen Thi Hong assessed that the complicated and unpredictable exchange rate developments were evident after President Trump announced the tax, with the exchange rate increasing by 0.6% on the first day. Especially when trade partners retaliate, the financial and monetary market will certainly be complicated every day and every hour. "The State Bank will closely monitor market developments to operate tools and solutions with reasonable timing and dosage, especially considering harmonizing goals," Governor Nguyen Thi Hong shared the management orientation.

Regarding the restructuring of the credit institution system, the Governor said that the SBV's Board of Directors has just held a meeting to summarize Decision 689/QD-TTg approving the Project "Restructuring the credit institution system associated with bad debt settlement in the period 2021-2025", in which the SBV has completed the compulsory transfer of 4 banks by the end of 2024 and early 2025. The progress is quite positive, the banks receiving the transfer are very responsible. However, there are still some issues that need support. That is, when approving the compulsory transfer project, the Government agreed on the support solutions applied according to the old Law on Credit Institutions and the support solutions according to the revised Law on Credit Institutions in 2024 to consider and submit later. "Currently, the SBV has proposed and hopes that ministries and branches, especially the Ministry of Justice, will pay attention and support to have solutions to support the restructuring process faster," the Governor expressed.

Source: https://thoibaonganhang.vn/tang-truong-tin-dung-quy-i-gap-25-lan-cung-ky-dong-gop-tich-cuc-vao-dau-tu-toan-xa-hoi-162365.html