Vietnam's outlook rating remains stable: S&P

The Ministry of Finance has announced that the rating agency Standard & Poor’s (S&P) on April 29 gave Vietnam a credit rating of BB-/B and a stable outlook, unchanged from the ratings announced in March 2015.

Photo for Illustration (Pho to: Thai Thien)

Accordingly, the stable outlook reflects Vietnam’s economic growth, while macro-economic factors have been positively recognised with an improved outlook by the agency and investors.

Factors that contributed to the positive S&P ratings, include a relatively diverse and flexible economy, and per capita income reaching an estimated US$2,200 in 2016.

In addition, macroeconomic stability at a relatively high level is a factor that makes a positive impact on export and foreign direct investment.

Over the past two years, appropriate socio-economic development policies have contributed to macroeconomic stability and effective inflation control at a low level.

Stable export growth, FDI, and remittances that tended to increase, along with the comparative advantage of labour costs compared to other countries in the region, continue to be significant factors helping to improve the balance of payments and the economy’s competitiveness.

S&P also noted that, over the coming time, Vietnam should pay attention to controlling its budget overspending, and the increasing rate of public debt and bad debt in the banking sector.

Prior to S&P’s rating, such issues had been recognised by the Vietnamese Government and National Assembly, with detailed plans formed to tackle them from now until 2020, aimed at controlling and bringing the budget over-expenditure to below 4% of GDP and keeping the public debt growth rate within the ceiling limit of 65% of GDP.

(Source: NDO)