National Assembly Economics Committee chair Vu Hong Thanh on May 20 presented a report on additional assessments of the results of socio-economic development in 2023 and the state budget plan.

Thanh mentioned nine groups of problems that need special attention, including the capital market (corporate bonds and securities). Because of many problems, the demand for mid- and long-term capital for the national economy is mostly being satisfied by commercial banks, which poses risks to the banking system.

Thanh asked the government to assess and specify the reasons and level of impact of credit growth on socio-economic development in 2023, and explain the high profits made by commercial banks in 2023 amid enterprises’ difficulties. 

Vietcombank, for example, made a profit of VND33.054 trillion, up 10 percent over 2022, while BIDV made VND22.027 trillion (+ 20 percent), Military Bank VND21.053 trillion (+ 16 percent) and VietinBank VND20.044 trillion (+ 18 percent).

Thanh also mentioned the realities of circular ownership, manipulation and group interest in the banking sector.

Noting the treatment of weak credit institutions and pending investment projects, Thanh asked the government to give detailed reports on problems in the legal framework and required support procedures, especially as the Law on Credit Institutions (amended) will take effect on July 1.

Gold prices

The report also pointed out challenges in the socio-economic performance in the first four months of the year.

The domestic gold market witnessed heavy fluctuations during that time, with the gold price index increasing by 20.8 percent compared with the same period last year amid higher gold prices in the world market.

The price increases were attributed to changes in the world economy and geopolitical uncertainties. However, observers believe the most important problem is in gold and foreign currency business management. 

An underground gold and foreign currency market exists in Vietnam with large transactions that are difficult to control, especially as people tend to hoard gold as property.

The World Gold Council reported that in Vietnam, 81 percent of investors have invested in gold and are considering doing it again. The figure is higher than China’s 72 percent, India’s 67 percent, and the global investor rate of 45 percent.

In 2022, Vietnam bought 43 tons of gold, up 37 percent over 2021, the highest figure in ASEAN.

Regarding corporate bonds, the market still has not fully recovered as investors lack confidence in issuers, thus putting pressure on enterprises' debt payment.

Thu Hang