Against the backdrop of heightened uncertainties surrounding the Covid-19 pandemic situation, Fitch's affirmation of Vietnam’s sovereign credit rating at “BB” indicates the country’s key credit strengths remain intact, according to the Ministry of Finance (MoF).

Headquarters of the Ministry of Finance in Hanoi.

This showcases the strong medium-term macroeconomic outlook, contained government debt burden as well as favorable external finances compared to peer countries, the MoF said in a statement on April 9.

According to the MoF, Fitch has acknowledged that Vietnam has taken advantage of favorable economic conditions in recent years to consolidate the fiscal position, accumulate foreign exchange reserves and continue to build buffers against external shocks.

As a result, Fitch expects Vietnam’s growth 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.

Fitch on Wednesday evening said it revised the outlook on Vietnam's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive and affirmed the rating at 'BB'.

“The outlook revision reflects the impact of the escalating Covid-19 pandemic on Vietnam's economy through its tourism and export sectors, and weakening domestic demand,” said Fitch.

The MoF said Vietnamese government agencies had provided Fitch with “concrete evidence to demonstrate the resilience of the economy in this challenging global environment.”

The Vietnamese government and people have been carrying out drastic and effective measures to proactively contain the spread of the coronavirus while maintaining socio-economic stability, laying foundations for a strong, sustained and socially inclusive recovery of the economy from the pandemic, stated the MoF.

The rating agency lowered Vietnam's GDP growth projections to 3.3% in 2020 from 7.0% in 2019, on account of the pandemic, the lowest annual growth rate since the mid-1980s. Vietnam's growth in the first quarter slowed to 3.8%, from about 7% in the previous quarter, according to government data.