Fitch Ratings has revised Vietnam’s outlook to positive from stable. (Source: vneconomy.vn)Hanoi (VNA) – Fitch Ratings has revised Vietnam’s outlook to positivefrom stable, and affirms the country’s Long-Term Foreign-Currency IssuerDefault Rating at “BB”.
The revision reflects an improving track record of theGovernment’s economic management, which is evident in strengthening externalbuffers from persistent current account surpluses, falling debt levels to higheconomic growth rate and stable inflation.
Fitch said that the Vietnamese Government’s continued commitment to containingdebt levels led to a decline in general government debt to 50.5 percent of GDPin 2018 from a peak of 53 percent in 2016. It expects the ratio to declinefurther to around 46 percent by 2020.
Meanwhile, the public debt (general government debt including guarantees) hasdropped to around 58 percent of GDP by the end of 2018 after being close to theceiling of 65 percent in 2016.
The decline has been facilitated by a reduction inoutstanding government guarantees to around 8 percent of GDP by the end of 2018from 9.1 percent in the end of 2017. Besides, it has been aided by stablereceipts from privatisation of state-owned enterprises, high nominal GDP growthand lower fiscal deficits.
Thanks to policies to stabilise the macroeconomy, GDPgrowth improved to 7.1 percent in 2018 from 6.8 percent in 2017 while inflationrate remained stable at 3.5 percent.
Fitch forecast Vietnam’s GDP growth at around 6.7percent in 2019, still within the National Assembly’s target of between 6.6-6.8percent.
It said that Vietnam’s economic growth is likely to beaffected by slowing global growth and the US-China trade tensions. Vietnamwould nevertheless remain among the fastest-growing economies in theAsia-Pacific as well as those in the “BB” rating category globally.
Last month, Standard and Poor’s(S&P) Global Ratings raised its long-term sovereign credit rating forVietnam to “BB” from “BB-“, which is expected to help the country attract moreforeign investments into the economy and expand exports. This was the firsttime S&P upgraded Vietnam’s credit rating since December 2010.-VNA
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