Vietnam’s credit growth is set to hit one of its highest levels in years, pushing the country’s credit-to-GDP ratio to the top among lower-middle-income economies, according to the State Bank of Vietnam (SBV).
At a press briefing, SBV Deputy Governor Pham Thanh Ha said outstanding credit in the banking system had risen 17.87% by December 24 compared to the start of the year, reaching VND 18,400 trillion (USD 700 billion). Credit flows have mainly targeted production and business activities, particularly priority sectors and key growth drivers aligned with government policy.
For the full year, credit expansion could reach 19%, the highest in many years, Pham Chi Quang, head of SBV’s monetary policy department, told the briefing. He noted that Vietnam’s credit-to-GDP ratio has climbed to 146%, the highest among lower-middle-income countries. In 2024, credit growth was 15.08%.
Quang highlighted structural risks for banks, as around 80% of their funding is short-term while roughly half of lending is medium- to long-term, creating a persistent mismatch and challenges for risk management. Credit growth of nearly 18% has also outpaced deposit growth of around 14%, putting pressure on system liquidity, particularly ahead of the Lunar New Year when seasonal fund demand rises. Banks face competition from other investment channels, making it harder to mobilize deposits to meet credit demand.
The central bank has responded with a range of monetary policy tools, including open market operations and a new foreign-exchange swap mechanism, to ensure liquidity.
Vietnam’s GDP growth reached 8% in 2025, driven by exports, foreign direct investment inflows, public investment, and domestic consumption. The National Assembly approved an economic growth target of at least 10% for 2026 with inflation controlled at around 4.5%.
The National Financial and Monetary Policy Advisory Council recommended a cautious approach for 2026, advising the government to coordinate monetary and fiscal policies carefully to manage risks related to interest rates, bad debts, exchange rates, and corporate bonds, Deputy Prime Minister Ho Duc Phoc said.
At the same briefing, Dao Xuan Tuan, head of SBV’s foreign exchange management department, said the central bank has received nine applications from banks and enterprises seeking licences to produce gold bars and is coordinating assessments with relevant authorities. Plans for a gold trading exchange have also been submitted to the government.
Source: The Investor
