The Ministry of Finance (MoF) said the credit rating agency’s upgrade of Vietnam’s outlook reflects the growth resilience of the country, which was among the few economies in the Asia Pacific region and the “BB” rating category to maintain positive growth in 2020, at 2.91%.VNA
Fitch Ratings recognised Vietnam’s fiscal and government debt achievements, its successes in bringing the coronavirus outbreak swiftly under control, strong policy support and export demand, along with continued strengthening of external finances due to persistent current account surpluses and rising international reserves.
It forecast GDP growth of about 7% in 2021 and 2022, in line with a broader global economic recovery sustaining export growth and a gradual normalisation of domestic economic activity based on its expectation of continued success by the authorities in containing domestic coronavirus infections.
The agency noted Vietnam’s efforts to maintain macro-economic stability, sustain high growth, reduce the GDP per capita gap vis-à-vis the country's peers, and further improve public finances, for example, through sustainable fiscal consolidation and debt stabilisation over the medium term are among factors that could, individually or collectively, lead to positive rating action.
Apart from Moody's Investors Service recently raising the outlook for Vietnam to “positive” from “negative” – an unprecedented move in its ranking globally since the start of the COVID-19 pandemic, Fitch Ratings’ upgrade of Vietnam’s outlook demonstrates credit rating organisations’ belief in the Government’s effective policies, strong growth prospects, and increasingly solid fiscal space, according to the MoF.
The MoF attributed the improvement in the country’s credit outlook to the actively implemented macro-economic stabilisation measures, the enhanced financial – banking system, along with ministries and sectors’ efforts to share updated information with Fitch Ratings.