The upgrade reflected R&I’s positive view of Vietnam’s economic growth fundamentals, prospects for structural reform, fiscal headroom and capacity to withstand external shocks. R&I expected strong growth to continue, supported by a shift towards a productivity- and innovation-led growth model, broader public investment and sustained foreign direct investment inflows.
Vietnam has entered investment grade for the first time after R&I raised its foreign-currency issuer rating to BBB- from BB+.
The outlook moved to stable from positive, with R&I citing growth fundamentals, reforms, fiscal space and shock resilience.
The finance ministry said the upgrade should support investor confidence and long-term capital mobilisation.
During sovereign credit rating assessments in April and May, the Ministry of Finance worked with relevant ministries and agencies and held direct discussions with R&I.
Drawing on Vietnam’s recent macroeconomic performance and its work with international rating agencies Moody’s, Fitch and S&P, the ministry provided updated information on the country’s macroeconomic conditions, public finances, public debt and reform progress, local media reported.
R&I noted that Vietnam had maintained robust growth and outperformed other Southeast Asian economies, according to the ministry. The agency said government reforms to streamline the state apparatus, promote the private sector, improve the institutional framework and develop capital markets would strengthen growth potential and economic resilience. It also welcomed the comprehensive reform programme and expected consistent implementation to help sustain high growth more steadily.
On public finances, R&I observed that Vietnam’s public debt-to-GDP ratio remained relatively low, leaving room to raise development investment. Although the budget deficit and public debt ratio were projected to increase in the coming years, the agency saw no immediate concerns over debt sustainability, as expanded public investment was expected to support future growth while the government sought to control recurrent expenditure.
Vietnam’s external position was also cited as a support factor, with R&I pointing to a persistent current account surplus, continued foreign direct investment inflows and relatively low external debt burdens as buffers against external shocks. The agency, however, highlighted risks linked to credit growth, banking liquidity, real estate lending, financial system capital adequacy and foreign exchange reserves.
The Ministry of Finance described the rating action as a major milestone in Vietnam’s efforts to strengthen sovereign creditworthiness through sustained growth, fiscal prudence and comprehensive reforms. It said the upgrade was expected to improve investor confidence, strengthen Vietnam’s position in international markets and facilitate long-term capital mobilisation for socio-economic development.
The ministry said it and other government agencies would continue to work closely with R&I and other rating agencies, providing timely and comprehensive information to support accurate and up-to-date assessments of Vietnam’s sovereign credit profile.
Fibre2Fashion News Desk (CG)
