S&P Global Ratings raises Vietnam’s sovereign credit rating

The S&P Global Ratings on May 26 raised its long-term sovereign credit rating on Vietnam to “BB+” with a “stable” outlook on the back of strong economic recovery, according to the Ministry of Finance.
G&P Global Ratings raises Vietnam’s sovereign credit rating
G&P Global Ratings raises Vietnam’s sovereign credit rating. (Photo: VOV)

According to the Ministry of Finance, the S&P upgrade shows the economy is on a solid recovery track following the government’s decisions to ease domestic COVID-19 restrictions and reopen its borders to the world, as well as due to its impressively improved vaccination and a flexible shift in COVID-19 control policy.

A marked improvement in administrative reform, especially related to external debt burden management, a strong economic outlook, a firm international position, and a robust FDI inflow are important factors that further support the rating.

It was a very positive move when S&P Global Ratings upgraded Vietnam’s sovereign credit rating amidst numerous global uncertainties and challenges, the Ministry said in a statement, adding that it reflects an international recognition of Vietnam’s efforts to stabilise and recover the macro-economy and reinforce the socio-political foundation.

Vietnam is one of the only two Asia-Pacific nations that have had its ratings upgraded since the beginning of this year, factoring in that Vietnam’s economy remains on a solid track to recovery following the complete removal of domestic and cross-border mobility restrictions, outstanding improvement in COVID-19 vaccination rates and a flexible shift in virus control strategy.

It is also attributed to the considerable improvement in the government’s public administrative procedures, especially in terms of administering guaranteed debt obligations; Vietnam’s strong economic outlook and external position; and resilient FDI flows despite COVID-19 disruptions.

S&P Global Ratings anticipated that over the next 12 – 24 months, Vietnam’s economy will continue to recover from the challenges caused by the pandemic, which will support the external position and contain the fiscal deficit.

It forecast that Vietnam’s GDP growth will reach 6.9 percent this year and maintain a long-term trend of growing 6.5 – 7 percent from 2023 onward.

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(Source: VNA/VOV)