Global rating agencies raise Vietnam's outlook to “positive”
Flexible management of fiscal policy and public debt under control have played a part in helping Vietnam cope with the pandemic.
Vietnam is the only country in the world having its outlook upgraded to “positive” by three major rating agencies of Moody’s, Standard and Poor’s (S&P), and Fitch since the Covid-19 outbreak.
|S&P raises Vietnam's outlook to positive. Photo: RICHARD B. LEVINE/Newscom|
S&P on May 21 announced its decision to keep Vietnam’s sovereign rating unchanged while raising the outlook from “stable” to “positive”.
S&P explained a positive assessment on Vietnam’s prospect was due to the country’s impressive economic achievements and continuous regulatory reform at a time when the pandemic is causing negative impacts on socio-economic development.
Following Vietnam’s GDP growth among the highest in the world last year, S&P expected the country would continue to maintain its economy in good shape for recovery in one or two years, thanks to effective measures to contain Covid-19 situation domestically; an attractive investment destination in Southeast Asian for FDI inflows; stable trade performance; and strong domestic demand.
Meanwhile, the flexible management of fiscal policy and public debt under control have also played a part in helping Vietnam cope with the pandemic.
The pandemic has caused the global economic recession, with rating agencies dropping their ratings and outlooks last year for countries/territories by 124 and 133 times, respectively.
As of May 21, 16 countries received low ratings from Moody’s, S&P, and Fitch.
Vietnam’s Ministry of Finance (MoF) said the country remains steadfast in pursuing the goal of stabilizing macro-economic conditions, bolstering economic resilience, and pushing for institutional reform along with efforts against the pandemic.
“This would help the country create a solid foundation to realizing its mid-and long-term goals, as well as raising the rating outlook,” said the MoF.
In April, Fitch revised Vietnam's outlook to positive from stable, while affirming the Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB'.
Moody’s in March announced a similar move, saying “the drivers of the positive outlook include signs of improvements in fiscal strength and potential improvements in economic strength that may strengthen Vietnam's credit profile over time.”
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