Given geopolitical turmoil and weakened domestic consumer demand, Vietnam’s export sector’s recovery is at risk of stalling. This challenging economic landscape makes it hard to absorb the anticipated VND2 quadrillion in credit and hundreds of trillions more in private and public investments projected for this year. Rethinking monetary policy amid slow credit growth According to the State Bank of Vietnam, credit growth remained sluggish in the year through mid-February. Commercial banks attribute this slow growth to seasonal factors and weak demand. Nguyen Thanh Tung, general director of Vietcombank, noted a decrease of around VND30 trillion in outstanding loans by the end of January compared to late 2023. This decline is primarily due to reduced mortgage loans throughout 2023 and in January, amidst challenging business conditions marked by declining incomes among citizens and a sluggish real estate market due to supply shortages. Real estate firms are still grappling with legal hurdles related to land issues, causing delays in new project approvals and hindering the disbursement of medium- and long-term loans. In addition to these challenges, several credit segments experience seasonal fluctuations. For example, outstanding loans for international payments typically increase at year-end due to holidays but dip as customers settle debts […]