Fitch Rating’s decision to keep Vietnam’s Long-Term foreign-currency issuer default rating (IDR) unchanged at ‘BB’ with a positive outlook showcases the country’s strong recovery prospects in the medium term, according to the Ministry of Finance (MoF).

Fitch expects Vietnam’s GDP growth to accelerate to 6.1% in 2022.

The MoF referred to the fact that Vietnam continues to benefit from exports thanks to its participation in several major trade deals, including the EVFTA, CPTPP, or UKVFTA, the positive foreign investment capital inflows, and the reopening of the tourism sector for foreign tourists.

This year, Fitch expects Vietnam’s GDP growth to accelerate to 6.1% in 2022 and 6.3% in 2023 from 2.6% in 2021, led by a recovery in domestic demand, strong exports, and high FDI inflows, particularly in the manufacturing sector.

The forecast coincides with the Government’s target of 6-6.5% for this year, and if materialized, would be a strong rebound from an economic expansion rate of 2.6% from 2021.

According to Fitch, the ability to launch the US$15.4-billion socio-economic recovery program in the 2022-2023 period was thanks to Vietnam’s success in stabilizing public debt, while the large external buffers offer a cushion against shocks and support a strong external liquidity ratio, which was 340% at end-2021.

In the coming time, efforts to sustain high growth that reduce the GDP per capita gap vis-à-vis Vietnam’s peers while maintaining macroeconomic stability would help lead to positive rating action for the country.

The rating agency also stressed the importance of improvements in public finances, through sustainable fiscal consolidation and debt stabilization over the medium term, as well as a higher revenue base or a reduction in the risk of contingent liabilities.