Fitch Ratings has affirmed Vietnam’s long-term foreign-currency issuer default rating (IDR) at “BB” with a positive outlook.

A report released on March 28 by the rating agency said the affirmation reflects Vietnam’s continued strong medium-term growth prospects, despite the COVID-19 pandemic and the global economic spillovers from the war in Ukraine, and strong external finance metrics relative to peers.

Fitch Ratings noted the rapid recovery of economic activities thanks to the Government's flexible approach in response to the pandemic and high vaccination rates.

Vietnam continues to benefit from the export sector thanks to the implementation of important trade agreements, foreign direct investment (FDI) inflows still maintain high growth and tourism flows gradually resume from 2022, it said.

Fitch forecasts that the country’s GDP growth to accelerate to 6.1 percent in 2022 and 6.3 percent in 2023 from 2.6 percent in 2021, led by a recovery in domestic demand, strong exports and high FDI inflows.

According to Fitch Ratings, Vietnam's success in stabilising public debt, its growth potential in the medium term and the rise of foreign exchange reserves which are reaching a record high are offering a cushion for the country to cope with external shocks.

It forecasts that efforts to maintain macroeconomic stability, strive for a high economic growth rate, reduce the disparity in GDP per capita compared to its peers and further improve public finances through sustained fiscal consolidation, expansion of the collection base, and medium-term debt stabilisation, overcoming weaknesses in the banking sector in terms of capitalisation, transparency regarding asset quality and regulatory frameworks, will be positive factors to help further enhance the country's credit rating in the coming time.

The Ministry of Finance (MoF) attributed the rating of the country at BB and positive outlook to the active implementation of macroeconomic stabilisation measures, reforming the financial-banking system as well as the pandemic control to stabilise life and resume production and business activities of the Party, National Assembly and Government of Vietnam.

The ministry will continue to work with Fitch Ratings, rating agencies and other international organisations to have full information and an authentic foundation to give an accurate and positive view of the country’s credit profile, it said./.