Bank money is still difficult to get out, growth momentum depends on public investment

ANTD.VN - The State Bank has loosened monetary policy and sought many ways to get money out, but it is still difficult to get money out. In that context, the growth engine in 2025 will be "in the hands of the Government", including budget spending and public investment.

Money supply will increase

Speaking at the Vietnam Investment Forum 2025 with the theme "Unblocking & Breaking Through" held on the morning of November 8, Mr. Nguyen Tu Anh, Director of the Center for Economic Information, Analysis and Forecasting, Central Economic Committee, assessed that Vietnam's monetary policy in 2025 will depend on many factors, including international influences on the monetary trend of the US Federal Reserve (Fed).

Mr. Nguyen Tu Anh, Director of the Center for Economic Information, Analysis and Forecast, Central Economic Committee

According to Mr. Nguyen Tu Anh, the Fed will have to continue to cut interest rates, even more so because the US's huge debt is up to 35,700 billion USD. Interest in 2024 is 892 billion USD, accounting for 3.1% of US GDP; while US investment spending on health, education and infrastructure accounts for only 2.4% of GDP. That is, the interest portion is getting bigger and bigger.

The second point is that foreign investors holding US debt have been on a downward trend, which means the US's ability to print money and affect the whole world through USD inflation will be less.

Thus, the US fiscal policy has reached its limit, and to achieve growth it will have to focus on monetary policy, leading to lower interest rates.

The second international factor affecting Vietnam's monetary policy is China as it is pushing more investment out, stimulating domestic demand.

From all of the above, the expert assessed that foreign investment flows in 2025 will likely increase sharply, making cash inflows better, leading to better cash outflows.

Along with that, the balance of payments in 2025 will be positive. At the same time, public investment capital will be strongly promoted. In addition, there will be restructuring of weak banks. These are three channels that will pump money into the economy in 2025 with the important goal of boosting growth.

Growth momentum comes from public investment

Regarding the growth momentum in 2025, according to Mr. Tu Anh, it will be led by investment demand, of which state investment is a part. Along with the recovery, expectations of the private investment economy may increase.

Mr. Tu Anh said that in 2024, the State Bank is looking for every way to get money out, but it is still difficult to get money out. In the first 9 months of the year, credit growth was 8.8%, not low compared to the same period in previous years, but M2 money supply increased slowly.

Low M2 money supply growth leads to no decrease in interest rates, the rate of capital mobilization growth, i.e. the rate of capital mobilization growth in the banking system, is only 5.8%, causing the cost of capital mobilization in the banking industry to increase.

“Therefore, one of the breakthroughs I hope for in 2025 is that public investment money will have new policies, pushing out state money quickly, reducing money in the State Treasury. When there is a lot of money in the market, market 1 can mobilize more easily, reducing pressure on banks to maintain low interest rates,” said Mr. Nguyen Tu Anh.

Mr. Nguyen Ba Hung, Chief Economist, Asian Development Bank (ADB) in Vietnam

Sharing the same view, Mr. Nguyen Ba Hung, Chief Economist, Asian Development Bank (ADB) in Vietnam also said that public investment is an important driving force of growth.

According to Mr. Hung, growth drivers on the demand side include consumption, investment, government spending and import and export.

In 2024, import-export and investment will be a very good driving force for Vietnam, foreign investment will continue to be positive, but rapid export growth will be based on the weak foundation of the previous year. By 2025, the world market will cool down, the export outlook in 2025 will not be maintained as this year.

Looking back at domestic dynamics, consumption is still weak, government spending, including public investment, is lower than planned. This could be the room to turn into a new growth driver in 2025.

"This year, private investment is weak, reflecting the difficulty of credit growth. In the context of weak domestic demand and domestic investment, it is necessary to rely on the room to increase government spending. Thus, the growth driver is in the hands of the government, including budget spending and public investment. The lever is public spending, stimulating domestic demand to increase domestic investment and consumption," Mr. Nguyen Ba Hung analyzed.

Source: https://www.anninhthudo.vn/tien-ngan-hang-van-kho-ra-dong-luc-tang-truong-trong-cho-o-dau-tu-cong-post594946.antd