Photo for illustration. (Source: baochinhphu.vn)
According to the Ministry of Finance, Fitch Ratings’ decision to lift the sovereign credit rating outlook to positive is driven by its recognition of Vietnam’s strong growth performance, public finances’ resilience to the COVID-19 shock and continued strengthening of the external balance sheet.
Fitch Ratings also recognizes that Vietnam is among the few economies in the Asia Pacific region and ‘BB’ rating category to maintain growth at 2.91% in 2020.
It acknowledges Vietnam’s outperformance in public finances, the Government’s success in bringing the COVID outbreak swiftly under control, alongside strong policy support allowing early resumption of social and economic activities. Vietnam’s resilient growth performance also reflects strong export demand, leading to a further strengthening of external finances due to persistent current account surpluses and rising international reserves.
The rating agency expects Vietnam’s GDP growth to reach 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 as the Government isexpected to continue the successful containment of domestic COVID infections.
Coupled with the recent positive outlook change by Moody’s, the first direct outlook change from negative to positive globally since the pandemic, Fitch Ratings’ positive outlook change reflects rating agencies’ confidence in Vietnam’s policy effectiveness, strong growth prospects and sustained resilience of public finances, positioning the sovereign credit rating on an upward trajectory.
Positive change of Vietnam’s credit outlook reflects the proactive measures by the Party, National Assembly and the Government to stabilize the macro-economy, strengthening the fiscal and banking system. It also reflects continuous communications by government agencies, as well as updates on developments in Vietnam with Fitch Ratings.
The Ministry of Finance confirmed that it would continue to provide information and updates to allow Fitch Ratings and other rating agencies to form an accurate assessment of Vietnam’s strong and improving credit profile./.