This is a very large resource and in the context that the economy is aiming for a growth target of over 10% according to Resolution 168/NQ-CP, expanding credit is necessary.
However, increasing credit is not the destination, but it is just a means to create growth. The most concerning thing is whether this capital flow goes to the right place.
If capital is put into processing and manufacturing enterprises, high-tech agriculture, supporting industries or areas that create added value, the economy will have more factories, more production lines, more jobs and more goods.
When production capacity is expanded, growth will have a more solid foundation and inflationary pressure will also be reduced.
Conversely, if cash flow mainly flows into speculative activities or only increases asset prices, the economy will find it difficult to create new value commensurate with the amount of capital invested.
At that time, the credit growth figure may be very beautiful, but the effectiveness for the real economy is not high.
That is why more and more experts believe that the success of monetary policy should not be assessed only by the rate of outstanding debt growth. What needs to be measured is how much capital has contributed to creating how much output, how many jobs and how many new incomes for people...
Looking at it from this perspective, the Government's request for close coordination between fiscal policy and monetary policy is appropriate and correct.
Fiscal policy through tax and fee exemptions and reductions, promoting public investment or supporting businesses will help improve cash flow and reduce short-term borrowing pressure. At that time, the banking system will have conditions to focus resources on medium and long-term investment projects that can create additional production capacity.
In other words, finance supports businesses to stand firm, while money creates motivation for businesses to develop. That coordination also helps reduce the burden on the banking system.
We cannot expect credit to bear the entire growth target of the economy alone, especially in the context that banks still have to ensure capital safety, control bad debts and maintain the stability of the financial system.
Finally, what businesses need is not only to borrow capital, but also a favorable business environment for that capital to generate profits.
And what the economy needs is not only rapid credit growth, but also improved production capacity, competitiveness and market confidence.
When these factors go hand in hand, credit truly becomes the driving force of growth and the goal of high growth can go hand in hand with sustainability.
