VietnamCredit
VietnamCredit About Us Cafe€redit Contact Us
Login
0
USD
Go to cart
Checkout
Fitch upgraded Vietnam's credit rating

Fitch upgraded Vietnam's credit rating

Monday 18, 12 2023
According to Fitch, cost competitiveness, a qualified workforce as well as accession to many regional and global free trade agreements have helped Vietnam to continue to strongly attract FDI inflows in the context of diversifying global supply chains.

A stable outlook

Credit rating agency Fitch Ratings has announced an upgrade of Vietnam's credit rating to BB+ with a "Stable" outlook. This is positive information about Vietnam's macroeconomic prospects.

Specifically, according to Fitch, the latest rating upgrade for Vietnam reflects a positive medium-term outlook, reinforced by foreign direct investment (FDI) flows.

credit rating

This credit rating agency believes that short-term economic challenges stemming from tensions in the real estate market, declining consumer demand and some policy implementation delays in Vietnam will not affect medium-term growth prospects of the economy because policy measures are expected to control short-term risks.

Fitch's report forecasts that Vietnam's medium-term GDP growth prospects are positive, reaching about 7%/year. Cost competitiveness, a qualified workforce as well as Vietnam's accession to many regional and global free trade agreements help continue to strongly attract FDI inflows in the context of diversifying global supply chain.

In addition, diplomatic relation between Vietnam and the US was upgraded to a comprehensive strategic partnership last September, which can create more favorable conditions for Vietnam's trade activities and FDI attraction.

Vietnam's foreign exchange reserves had increased to 89 billion USD by the end of September 2023 after a sharp decrease in 2022, showing a positive return of capital flows and trade surplus. Fitch expects these reserves to continue to improve, thanks to a widening trade surplus in 2024 and 2025.

Vietnam's foreign exchange

Vietnam's foreign debt structure is also favorable because the majority of debt comes from bilateral or multilateral parties. This helps reduce the burden of foreign debt repayment and supports foreign currency liquidity.

Economic growth will help maintain public finances at healthy levels, with government debt forecast to continue to remain lower than peer countries.

Government’s policies

In addition, the BB+ rating also points out other factors such as controlled risks in the real estate sector, a large-scale financial system, and appropriate and timely fiscal and monetary policies of the Government.

Fitch

Fitch also noted a number of challenges for Vietnam's economy such as short-term growth difficulties, lower development indicators compared to countries in the same development segment, etc.

According to Fitch, with the Government continuing to implement supportive policies to stimulate growth and stabilize the macroeconomy, Vietnam's economy will regain growth momentum in the near future.

Source: Fitch, theleader

Compiled by VietnamCredit

 

Categories
Banking & Finance

You may also like

Fitch: Vietnam's credit rating upgraded
Monday 17, 02 2020

Fitch: Vietnam's credit rating upgraded

Fitch Ratings has moved up the outlook on Vietnam's long-term foreign-and...
What are credit rating agencies “thinking about the banking system of Vietnam?
Saturday 19, 10 2019

What are credit rating agencies “thinking" about the banking system of Vietnam?

According to the general method, before making a statement and assessment...
0
0
+84 981861066