Vietnam’s positive sovereign rating would create a positive impact on the economy and further attract direct and indirect investment capital into the economy.

General Director of the Debt Management and External Finance Department Truong Hung Long. Source: MoF

General Director of the Debt Management and External Finance Department under the Ministry of Finance Truong Hung Long told the local media about S&P Global Rating’s decision to upgrade its long-term foreign and local currency sovereign credit ratings on Vietnam to ‘BB+’ from ‘BB’.

The rating agency also affirmed the country’s short-term rating is ‘B’ with a stable outlook.

According to Long, the upgrade in Vietnam’s credit rating was thanks to the firm economic recovery at a time when the Government is gradually reopening the economy.

“The bright economic prospect, sound external position, and positive FDI inflows amid severe pandemic impacts are the key factor in S&P’s decision,” he said.

S&P also highlighted Vietnam’s high vaccination rate and its swift transition in the Covid-19 response strategy.

Meanwhile, Vietnam’s flexible fiscal policy and a lower public debt have solidified the economic resilience against future shocks, while significant improvements in administrative reforms, especially in timely payment of guaranteed debts have convinced S&P to upgrade Vietnam’s rating, Long said.

Long stressed the significance of Vietnam’s rating upgrade, especially as growing global uncertainties and the pandemic impacts have led to the 30 downgrades recently.

Vietnam is now among two countries in the Asia-Pacific with a credit upgrade since the beginning of the year.

The last time S&P upgraded Vietnam’s rating to “BB” was in April 2019. “After four years, S&P decided to upgrade the rating, which shows the high regard of the global community for the governance capability of the Government,” he added.

In addition, this is one step closer to Vietnam’s rating to soon reach the BBB-  an investment grade, and realize the target set by the Government by 2030.

Long said Vietnam would further improve its governance capability, especially in the quality of legal institutions and transparency, along with resilience against potential shocks.

This year, S&P forecast Vietnam’s GDP growth to reach 6.9% before settling closer to the country’s long-term trend of growing 6.5-7% from 2023 onward. The high economic growth would help Vietnam’s GDP per capita to reach US$3,868.