S&P raises Vietnam’s long-term credit rating to BB+, outlook “Stable”

S&P lifts national credit rating of Vietnam on the basis of the recognition that the economy is on a solid recovery track in the context of the Government lifting restrictions on domestic and cross-border movement, impressively improved vaccination rates and a flexible active in the COVID control policy. A marked improvement in the Government’s administrative processes and procedures, especially related to the quality of guaranteed debt management, along with a strong economic outlook, a solid foreign position, and high income. Attracting FDI inflows despite the disruption caused by the pandemic were important factors that made S&P decide to upgrade Vietnam’s rating.

The “Stable” outlook represents S&P’s forecast that in the next 12-24 months, Vietnam’s economy will continue to recover, overcome difficulties and challenges caused by the pandemic in the past two years, and contribute to consolidation. foreign position and control the budget deficit.

S&P assesses that Vietnam’s per capita income has increased rapidly in recent years with a 10-year real growth rate of 4.8%, significantly higher than the average of countries with similar income levels. copper. S&P forecasts Vietnam’s GDP growth in 2022 at around 6.9% with a long-term trend of 6.5%-7% from 2023. Macroeconomic stability coupled with competitive advantages in labor, Improved educational standards and favorable demographics are key drivers of the increasing attractiveness of the manufacturing sector to global firms, driving export growth and boosting consumption. .

On the social front, S&P recognizes that Vietnam has achieved many strong development achievements over the past decade, contributing to strengthening the strong bond between the Government and the people.

In the fiscal field, S&P assesses that Vietnam’s public finance remains in a stable state, even in the context that the state budget revenue and expenditure are under certain pressure due to the impact of the pandemic. This organization forecasts that the budget deficit may increase temporarily with the implementation of the Socio-Economic Development and Recovery Program, but assesses that policy room is still abundant in the context of a sharp decrease in public debt. .

The fact that S&P raised Vietnam’s national credit rating in the context of global turmoil and challenges is very positive, showing the international community’s appreciation for its efforts in directing and regulating activities of the Party, National Assembly and Government of Vietnam to stabilize and restore the macro-economy, strengthen the socio-political foundation; efforts of the Ministry of Finance and related ministries and branches in conveying Vietnam’s policies and achievements to credit rating agencies and international organizations. In the context of the complicated international situation and the profound impact from the pandemic leading to 30 credit downgrades in the world, Vietnam is one of two countries in the Asia-Pacific region. been upgraded from the beginning of the year until now.

The Ministry of Finance will continue to coordinate with S&P, other credit rating agencies as well as other international organizations to continue to have a complete and up-to-date assessment of Vietnam’s credit profile.

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