Moody’s changes Viet Nam’s outlook to positive

Moody's Investors Service (Moody's) has maintained the Government of Viet Nam's long-term issuer and senior unsecured ratings at Ba3 and changed the outlook to positive from negative.
Moody’s changes Viet Nam’s outlook to positive
Viet Nam's economic strength may benefit from global shifts in production, trade and consumption following the coronavirus pandemic.

The drivers of the positive outlook include signs of improvements in fiscal strength and potential improvements in economic strength that may strengthen Viet Nam's credit profile over time. Sustained fiscal consolidation has led to improvements in fiscal and debt metrics, which Moody's expects to be only briefly interrupted by the pandemic.

Moreover, Viet Nam's economic strength may benefit from global shifts in production, trade and consumption following the coronavirus pandemic. Over time, indications of higher fiscal and economic strength may point to improving policy effectiveness, also putting upward pressure on Viet Nam's credit profile.

The affirmation of the Ba3 rating is underpinned by ongoing credit strengths and weaknesses, including a large, diversified economy with high growth potential offering resilience to shocks, and increasing capacity in the domestic financial system to finance government borrowing at low costs.

Viet Nam's local- and foreign-currency ceilings are unchanged at Baa3 and Ba2, respectively.

In its evaluation, Moody’s also considered other factors such as the environment, society, air pollution, extreme weather conditions, which it held that Viet Nam should give greater attention to.

Moody’s raising of two positions in outlook prospect is an unprecedented move in its ranking globally since the start of the COVID-19 pandemic, which is a considerable recognition for Viet Nam.

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(Source: VNA)