Vietnam complacent over credit risks

Policymakers in Vietnam are becoming increasingly complacent of the risks posed by the rapid build-up in debt, as reflected by the government’s recent announcement that it was targeting credit growth of 17% this year. Such an outcome would be almost double the rate of nominal GDP growth, and is unsustainable over the long-term. Unless the government is prepared to get to grips and tighten policy, another sharp rise in non-performing loans looks inevitable.