According to the World Bank, Vietnam’s economic growth in the first half of 2015 stands at 6%, the highest increase for the past five years. This is attributable to growth in manufacturing and tourism. These two sectors contribute nearly half of GDP growth. The low inflation rate in the past year has allowed the State Bank of Vietnam to relax monetary policies. This, along with the interest rate cut supported by cautious macro-economic measures has enabled banks to maintain lower lending interest rates.
As a result, credit grew by 7.9% within the first half of 2015, fulfilling the State Bank of Vietnam’s target. However, World Bank also highlights that although public debt is still within a safe range, the costs to repay this debt is exceeding spending for other investment within the state budget. The restructuring of the banking sector and state-owned enterprises also remains a challenge./.
