S&P Global Ratings announced late last week that it had retained Vietnam’s sovereign credit rating and improved its economic outlook from “positive” to “stable”.
That made Vietnam the only country in the world to see its outlook improved this year by three credit rating agencies, Moody’s, S&P and Fitch, according to the finance ministry.
The S&P made this decision based on Vietnam’s impressive economic achievements and policy-making reforms amid the Covid-19 pandemic.
The agency said Vietnam, after recording one of the world’s highest economic growth rates in 2020, would continue a strong recovery over the next two years thanks to the government’s effective measures against the pandemic, efforts to attract foreign investment, stable exports, strong domestic demand and a strong external position.
Vietnam’s fiscal and public debt policies have been shown to be efficient and flexible, which has contributed significantly to controlling the pandemic, the agency said.
In mid-March, Moody’s Investors Service raised its outlook for Vietnam from “negative” to “positive” and confirmed the country’s long-term credit rating to Ba3. Drivers for the positive outlook included signs of improving fiscal soundness and potential improvements in economic soundness that could strengthen Vietnam’s credit profile over time.
At the start of last month, Fitch Ratings revised Vietnam’s outlook from “positive” to “stable” and upheld the long-term default rating of foreign currency issuers at “BB”, given the country’s success in restraining the coronavirus outbreak quickly, alongside strong political support and export demand.
The Covid-19 pandemic has caused social instability and an economic slowdown in many countries around the world.
Last year, credit rating agencies downgraded the sovereign credit rating 124 times and the economic outlook 133 times globally.
From the start of this year to May 21, 16 countries saw their outlook downgraded by Moody’s, S&P and Fitch.
The Ministry of Finance said that the Vietnamese government will continue to pursue the objective of consolidating the macroeconomic base, maintaining stable growth of production and trade, improving the internal capacity of the economy, boosting the institutional reform in combination with the fight against the pandemic, to contribute to achieving the medium and long term objectives of the country and the improvement of the national stature.
In the near future, the ministry and government agencies will continue to strengthen collaboration and information sharing with credit rating agencies and international organizations to fuel socio-economic development and improve Vietnam’s creditworthiness, the Minister said. ministry.
The Asian Development Bank in its Asia Development Outlook 2021 launched at the end of last month, forecast Vietnamese economy growth of 6.7% this year, despite the return of the virus, and 7% in 2022.
The World Bank, however, warned in mid-May of several risks to the Vietnamese economy due to the fourth virus outbreak in Vietnam from late last month. With new restrictive measures in place, the epidemic would affect national economic activities, especially tourism, transport and retail.
The World Bank has recommended that the Vietnamese government consider boosting domestic demand through the application of more adaptive fiscal policies, including a larger-scale support program for people and businesses affected by the pandemic.
Although 2020 was seen as a difficult year for the global economy due to the impacts of the pandemic, the Vietnamese economy managed to grow at 2.91% while many countries experienced significant recessions.
Vietnam’s economy reached $ 343 billion last year, making the country the fourth-largest economy in the Southeast Asia region, after Indonesia ($ 1,088 billion), Thailand ($ 509 billion). dollars) and the Philippines ($ 367 billion).
The government has set the target for gross domestic product (GDP) growth at 6.5 percent this year, above the National Assembly’s plan of 6 percent.
VIET NAM / ASIA NEWS NETWORK