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Fitch revised Vietnam's outlook to “Positive”

05/04/2021

Fitch Ratings has affirmed Vietnam’s long-term foreign-currency issuer default rating (IDR) at 'BB', revised outlook to “Positive” from “Stable”.

The revision of the Fitch Ratings’ outlook to “Positive” reflects Vietnam's growth resilience, one of the very few economies in the Asia-Pacific region and in the group of BB countries that can maintain positive growth at 2.91% in 2020 in the context of COVID-19 pandemic.

Fitch Ratings recognized Vietnam's fiscal and Government debt achievements, the Government's success in quickly controlling the COVID pandemic right from the beginning, along with timely support policies aimed at early recovery of socio-economic activities.

Vietnam's outstanding performance was also attributed to strong export demand, strengthened external finances thanks to Vietnam's current account remained in surplus and increased foreign exchange reserves.

The agency forecasts Vietnam's growth rate of about 7% in 2021 and 2022, in line with a broader global economic recovery sustaining export growth and a gradual normalization of domestic economic activity, and expectation of continued success by the Government in containing COVID-19 pandemic.

Fitch Ratings forecasts efforts to maintain macroeconomic stability, strive for high growth rates, reduce the gap in GDP per capita compared to other countries in the same ranking with Vietnam, and further improve public finance through sustainable fiscal consolidation and debt stabilization over the medium term, etc. will be positive factors for further improvement of the national credit rating in the upcoming period.

Along with Moody's change of outlook for Vietnam by two places - something unprecedented in the credit rating of this agency globally since the beginning of the COVID-19 pandemic - Moody's revision of outlook for Vietnam has shown the confidence of the rating agency in effective government policy and governance, strong growth prospects and fiscal consolidation.

The improvement in the sovereign rating outlook is a result of the active implementation of measures to stabilize the macro-economy, strengthen the financial-banking system of the Party, the National Assembly and the Government; It is also the result of ministries and agencies in explaining, exchanging and sharing updated information with Fitch Ratings.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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