Vietnam central bank leans into aggressive credit push to sustain growth
Vietnam’s central bank said on Friday it would prioritise growth this year by targeting a credit expansion of 19–20%, a signal that monetary policy will remain loose even amid external uncertainties.
Deputy Governor Pham Thanh Ha said commercial banks would be encouraged to cut lending rates, particularly to support investment and export activity. But he cautioned authorities would maintain tighter controls over loans to high-risk sectors to guard against financial instability.
The policy move comes as Vietnam’s economy remains resilient in the face of headwinds, including U.S. tariffs imposed in August that have weighed on exports of footwear and textiles. Despite these pressures, Vietnam posted annual GDP growth of 8.23% in the third quarter—the strongest quarterly pace in years.
But not all signs are unambiguously positive. The International Monetary Fund recently revised down its full-year forecast for Vietnam’s economic growth to 6.5%, warning that tariff pressures and fading one-off stimulus could drag on performance. Meanwhile, the World Bank has already lowered its own forecast to 6.6%.
Vietnam’s credit stock had risen about 13.4% by end-September compared with end-2024, leaving room for further expansion under the central bank’s new ambition.
Still, some analysts warn that aggressive credit growth carries risks. Overextension in property, consumer lending, or speculative sectors could lead to asset bubbles or higher non-performing loans. The central bank’s dual task—supporting growth while preserving financial stability—will be tested in the coming months.
Investor response, outlook
Financial markets in Vietnam responded favourably to the central bank’s growth-oriented stance. The stock market rose after the announcement, reflecting optimism that authorities will maintain policy support even as external pressures intensify.
Looking ahead, the central bank’s strategy will likely hinge on the balance between sustaining credit growth and managing risks from rising leverage. With external headwinds persisting and growth forecasts under pressure, the authorities appear set to double down on accommodative monetary tools as a buffer against downside risks.
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Sources: Reuters wire — Vietnam central bank to prioritise growth and expand credit Reuters; Vietnam economy posts 8.23% growth in Q3 Reuters+1; IMF and World Bank revised forecasts