HCMC – Credit growth in HCMC had risen by an estimated 4.5% in the year to the end of August compared to late 2023, well below the national average of 6.63%, according to the city’s Statistics Office.
Despite better-than-expected economic growth and relatively low lending rates, the city’s credit expansion has fallen short of expectations.
The Statistics Office noted a recent slowdown, with credit growth slipping from 4% in June to 3.9% in July, before slightly recovering to 4.5% in August.
Lending rates have dropped, with short-term loan rates decreasing 0.9 to one percentage point compared to late 2023. However, the city’s ability to absorb capital remains limited, raising concerns about achieving the full-year credit growth target of 15%.
Nguyen Duc Lenh, deputy director of the State Bank of Vietnam’s HCMC branch, said that the slower credit growth reflects the current capital demand among local businesses. He attributed the decline to ongoing challenges in production and business activities within the city.
Industrial production in HCMC grew by 6.2% in the first eight months of 2024, marking the highest rate this year, but the overall recovery remains sluggish.
The manufacturing sector, a significant component of the city’s economy, experienced lower-than-expected growth, with the labor force dropping 3.8%.
Retail sales and services revenue rose 10.3% year-on-year during the same period. However, when adjusted for inflation, the actual increase was marginal. The challenging business environment continues to impact the market, with six out of 10 companies ceasing operations during the period.
