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Fitch Ratings upgrades Vietnam’s outlook to positive
The Saigon Times
Friday,  Apr 2, 2021,17:38 (GMT+7)

Fitch Ratings upgrades Vietnam’s outlook to positive

The Saigon Times

Vietnamese workers make shoes for export. Fitch Ratings has revised Vietnam’s outlook to positive from stable – PHOTO: VNA

HCMC – Fitch Ratings, a global leader in credit ratings and research, has revised Vietnam’s outlook to positive from stable and affirmed the long-term foreign currency issuer default ratings (IDR) at “BB”, according to the Ministry of Finance.

The positive outlook reflects the resilience of Vietnam’s growth and public finances to the Covid-19 pandemic. Vietnam was among the few economies in the Asia Pacific region and the “BB” rating category to maintain positive growth in 2020, at 2.9%.

The relative strength of Vietnam’s performance was largely due to its success in bringing the coronavirus outbreaks swiftly under control, despite the pandemic’s impact on domestic economic activity and tourism inflows, alongside strong policy support and export demand.

Fitch Ratings expects the country’s GDP growth to be around 7% in 2021 and 2022, in line with a broader global economic recovery sustaining export growth and a gradual normalization of domestic economic activity based on its expectation of continued success by the authorities in containing coronavirus infections.

Fitch Ratings also highlighted some factors that could, individually or collectively, lead to a positive rating, including maintaining macro-economic stability, sustaining high growth and reducing the gross domestic product per capita gap vis-à-vis the country’s peers.

Further improvement in public finances, for example, through sustainable fiscal consolidation and debt stabilization over the medium term; a higher revenue base or a reduction in the risk of contingent liabilities; and a material reduction in risks posed to the sovereign balance sheet from weaknesses in the banking sector are also among the factors.

Apart from Moody’s Investors Service 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 the faith of the credit rating organizations in the Government’s effective policies, strong growth prospects and solid fiscal space, according to the ministry.

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