汇丰银行-越南-宏观经济-越南一瞥：促进经济增长的更多信贷-20170901-Vietnam at a glance：More credit to drive growth-HSBC.pdfVIP

1 September 2017   Vietnam at a glance ECONOMICS VIETNAM More credit to drive growth  Vietnamese officials are calling for an increase of the country’s Noelan Arbis Economist, ASEAN credit growth target from 18% to 21% for 2017 The Hongkong and Shanghai Banking Corporation Limited noelan.arbis@.hk  We believe this should be easily achievable, but may accentuate +852 2822 4325 distortions in credit allocation and over time affect credit quality  Meanwhile, August CPI bounced back to 3.4% y-o-y from 2.5%, turning up after six consecutive months of cooling Doubling-down on credit: Top government officials are calling for an increase in the credit growth target from 18% to 21% in hopes of reaching the government’s 6.7% GDP target for 2017 (Reuters, 14 August). The economy grew at just 5.7% in 1H17, and in light of already high public debt, Vietnamese officials are signalling that they aim to achieve higher growth via the credit channel. For now, there has been no official announcement that the credit growth target has been increased. Achievable, but with risks: We believe a 21% credit growth target could be easily achieved, given the current pace of credit growth and the State Bank of Vietnam’s rate cuts in July. However, the allocation of credit has continued to lean toward less productive industries, such as real-estate, and toward state-owned enterprises (SOEs), at t