Vietnam included in investment grade by R&I for the first time
WVR - On October 8, Japan's Rating and Investment Information (R&I) upgraded Vietnam's foreign currency issuer credit rating from BB , Positive outlook to BBB-, Stable outlook.
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| R&I assesses Vietnam's public debt as relatively low and sees no significant concerns regarding debt sustainability. (Photo: Unsplash) |
This marks the first time Vietnam has been included in the Investment Grade category by R&I.
According to the Ministry of Finance, R&I positively evaluates Vietnam's economic growth foundation, structural reform prospects, fiscal space, and resilience to external shocks.
R&I believes that future growth momentum may stem from a shift to a productivity and innovation-based growth model, expansion of public investment, and FDI inflows.
The organization also positively assesses reforms related to streamlining the apparatus, promoting the private sector, improving institutional frameworks, and developing the capital market.
In terms of fiscal aspects, R&I assesses Vietnam's public debt as relatively low and sees no significant concerns regarding debt sustainability. A current account surplus, sustained FDI inflows, and relatively low external debt burden are also considered factors supporting debt repayment capacity and resilience to external fluctuations.
However, R&I also points out issues Vietnam needs to monitor, including credit growth, banking liquidity, real estate lending, the financial system's capital supply capability, and the scale of foreign exchange reserves.
These assessments indicate that the credit rating upgrade is not a “destination” but a confirmation that the economy's credit profile has improved significantly enough to reach a new level.
Moreover, the factors R&I continues to highlight are precisely the areas Vietnam needs to strengthen to maintain and enhance credit quality in the coming years.
Following the upgrade, Vietnam can be more proactive in investor engagement programs in Tokyo, Osaka, and major financial centers in Japan.
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