Upgrading credit rating helps Vietnam maintain growth momentum

Fitch Ratings noted Vietnam's favorable medium-term growth prospects thanks to positive foreign investment attraction, better foreign exchange reserves...

Last week, Fitch Ratings upgraded Vietnam's long-term national credit rating to BB+ "Stable Outlook" in the context of the world facing challenges of declining growth and trade. trade, increasing financial risks in many countries. This strengthens the confidence of investors, especially foreign investors, in the Vietnamese economy.

Fitch Ratings noted Vietnam's favorable medium-term growth prospects thanks to positive foreign investment attraction, better foreign exchange reserves, reduced real estate market pressure, and low government debt.

Ms. Sagarika Chandre - Director of Fitch Ratings National Credit Rating, Asia-Pacific region said: "Analysis shows that Vietnam's foreign exchange reserves have gradually improved after a sharp decrease last year." and is forecast to improve in the next 2 years. This reflects the return of strong foreign investment flows into Vietnam from the second half of this year."

 Upgrading credit rating helps Vietnam maintain growth momentum. Illustration.

According to Fitch Ratings, Vietnam has an advantage in attracting FDI capital flows thanks to recent investment prospects, as well as trade advantages through a system of free trade agreements. The shifting of global supply chains and production chains associated with technology is moving faster in the context of a volatile world, making Vietnam even more attractive to investors.

Ms. Dorsati Madani - Senior Economist at the World Bank in Vietnam commented: "The PMI index is reflecting a deep decline in world demand. But Vietnam has taken advantage of both traditional and new markets." Through FTAs, the decline in exports has gradually narrowed . This positivity also creates more motivation for industrial production to grow, especially the main driver of processing and manufacturing will be better next month. last month, thereby creating confidence for new investments both directly and indirectly."

Being upgraded also shows better economic prospects and higher reputation, which means better debt repayment ability. Thanks to this, Vietnam's borrowing costs in the public and private sectors can be reduced.

Mr. Jonathan Pincus - Chief Economic Expert of the United Nations Development Program (UNDP) in Vietnam assessed: "For developing countries, access to loans and associated interest rates are very important. When As Vietnam upgrades its credit rating, borrowing costs decrease, the economy will reduce the payment burden, as well as devote more resources to growth. Therefore, Vietnam needs to continue to improve the efficiency of public finances, allocation and management of public resources".

In 2022, based on Moody's criteria, Vietnam still has 2 levels to become an investment country. With S&P Global Ratings, Vietnam has 1 level left to reach Investment level. As for Fitch Ratings, Vietnam currently has 1 level left to reach Investment level. Thus, Vietnam has many prospects to soon become an investment country by 2030 as set target.

According to vtv.vn