11:02:48 AM | 4/20/2020
Fitch Ratings retained Vietnam’s sovereignty rating at BB and revised its outlook from positive to stable.
Key rating drivers for Fitch to revise its outlook on Vietnam reflects the negative impact of the escalating Covid-19 pandemic on the world economy and world credit, including Vietnam, through tourism and export sectors, and weakening domestic demand.
During working sessions between Fitch Ratings and the Ministry of Finance and relevant agencies to assess the national credit rating at the end of March 2020, the Vietnamese side exchanged and presented convincing evidence on its economic resilience in today's challenging global context. The Government and the entire people of Vietnam have made strenuous and effective efforts and have achieved initial successes in controlling the spread of the epidemic on the one hand and effectively performing socio-economic development and social security tasks on the other. This result has been highly appreciated by the World Health Organization, governments of other countries as well as the international community, thus helping foster a favorable foundation for strong economic recovery after the epidemic is controlled.
Given the complicated, unpredictable development of the epidemic as now, the fact that Fitch affirmed to maintain the national sovereignty rating at BB reflects that Vietnam’s bright credit outlook is not affected. The affirmation reflects Vietnam's strong medium-term growth prospects, lengthening record of macro stability, lower government debt levels and stronger external finances compared with peers. Fitch also appreciated Vietnam for building up foreign-exchange reserves over the previous few years during more favorable economic conditions to increase the buffer against macro risks.
Fitch expected Vietnam’s economic momentum to rebound in 2021, with growth projected at 7.3% as external and domestic demand gradually recovers in line with global and regional trends.
In the past month, Fitch revised down sovereignty rating to negative to 19 countries around the globe, with seven having their outlook downgraded.
The Ministry of Finance and relevant agencies have been working closely and updating information on the socio-economic situation in Vietnam amid the ongoing epidemic for Fitch Ratings. Thus, the Ministry of Finance believed that Fitch and other credit rating agencies will have sufficient information to provide a correct and positive view on Vietnam's credit profile in the future.
By Le Hien, Vietnam Business Forum
Vietnamese
