Fitch Ratings has upgraded Vietnam's sovereign credit rating, citing favorable medium-term growth prospects, underpinned by strong foreign investment flows.
Fitch Ratings assesses that challenges to the economy from difficulties in the real estate market and weak global demand will have little impact on the macroeconomic outlook in the medium term, while ample policy space will help control risks in the short term. Economic growth will continue to strengthen the healthy public finances, with government debt forecast to remain at a lower level than countries with similar credit ratings.
Cat Lai Port ( Ho Chi Minh City) is one of the international transit gateways. Illustration photo: Hong Dat/VNA
In the medium term, Fitch Ratings forecasts Vietnam’s economic growth at around 7%, driven by strong foreign direct investment (FDI) inflows and an abundant labor force. In addition, participation in a wide network of regional and global free trade agreements (FTAs) in the context of diversifying supply chains and upgrading relations with the United States to a “Comprehensive Strategic Partnership” will continue to promote stronger FDI attraction to Vietnam.
According to Fitch Ratings, Vietnam's foreign exchange reserves have gradually improved after a sharp decline in 2022 and will continue to improve in 2024 and 2025, reflecting returning capital inflows and a larger trade surplus.
One of the factors that Fitch Ratings highly appreciates in Vietnam's credit profile is that the Government's debt is much lower than that of countries with the same BB rating. The Government's favorable foreign debt structure and low foreign debt repayment obligations have contributed to reducing the foreign debt burden and strengthening the liquidity index. In the medium term, budget revenue will be strengthened thanks to solutions to expand the tax base set out in Vietnam's Financial Strategy to 2030.
Fitch Ratings believes that with the Vietnamese Government continuing to implement policies to support growth and stabilize the macro economy, the economy will regain growth momentum in the coming time.
The Ministry of Finance assessed that Fitch Ratings's upgrade of Vietnam's national credit rating in the context of the world facing challenges of declining growth, economy, trade as well as increasing financial risks in many countries has demonstrated the international community's extremely positive assessment of the efforts of the Party, National Assembly and Government of Vietnam in recent times to stabilize the macroeconomy and restore the economy, consolidate the political and social foundation; the efforts of the Ministry of Finance and relevant ministries and branches in regularly updating and periodically transmitting information on achievements and results in Vietnam's socio-economic development to credit rating organizations and the investor community.
The Ministry of Finance said it will continue to coordinate with Fitch Ratings and other credit rating agencies and international organizations to continue to have a full and updated assessment of Vietnam's credit profile.
According to VNA/Tin Tuc Newspaper
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