Bao Viet Securities analysts said in a report that there was immense pressure on the Government to loosen monetary policy as Vietnam was determined to achieve the GDP growth target of 6.7% for the full year, however, the fiscal policy was struggling with disbursement of public investment.
Until the end of May, disbursement of public investments reached VND88 trillion, only equivalent to 30.6% of the full year’s estimate, according to the General Statistics Office.
Bao Viet Securities said when fiscal policy did not support growth well, pressure would intensify on the monetary policy. Lifting credit growth targets for several banks might be an option to consider, the analysts said.
When the monetary policy was loosened, the liquidity of the banking system would be increased, which would create favourable conditions for Government bond issuance.
The State Treasury, to date, has completed more than 70% of the bond issuance plan of 2017.
The General Statistics Office revealed that credit growth reached 7.54% in the first six months of this year. The central bank set credit growth target at 18% this year.