Vietnam PM orders tighter control of real estate loans

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Vietnam's Prime Minister Nguyen Tan Dung asked commercial banks to tighten control over real estate loans on Tuesday to prevent a property market bubble.

Loans for the real estate sector in the first five months reached VND192 trillion (US$10.1 billion), accounting for 10 percent of all loans in the country, according to the State Bank of Vietnam.

PM Dung said at a monthly cabinet meeting that government agencies need to monitor housing prices in large cities carefully and prevent speculation.

He also ordered all ministries and industries to ensure that the economic growth target of 6.5 percent for this year can be achieved.

The economy has remained stable with exports rising while inflation and the trade deficit are under control, said chief of the government office Nguyen Xuan Phuc.

However, he told a press briefing after the government meeting that inflation was still too high and the property market not stable enough.

He also said electricity shortages were adversly affecting the economy.

Phuc also announced that the government had decided to simplify 258 administrative formalities, mainly related to customs, taxes and construction licensing. The simplifications will help save VND5.7 trillion every year, he said.

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