On 21st May 2020, S&P Global Ratings (“S&P”) announced in a Press Release to affirm the Government of Viet Nam’s sovereign credit ratings at BB with Stable outlook.
S&P’s affirmation on Viet Nam’s sovereign credit ratings at ‘BB’ reflects its assessment on robust recovery potential of the country’s economy following a slowdown owing to COVID-19 pandemic in 2020. The agency observes that strong growth achievements of Viet Nam in recent years will continue to underpin our country’s ratings. S&P has also considered the potential challenges to Viet Nam’s fiscal position and banking sector in case the global economic slowdown situation persists. The stable outlook reflects S&P’s expectation that Viet Nam’s economy will rapidly recover and rebalance when the global pandemic is contained, with exports and aggregate domestic demand being the main growth drivers, keeping Viet Nam’s ratings well above the average of its peers. In the scenario that the pandemic is largely contained toward the end of 2020 or the beginning of 2021, S&P expects real GDP growth to rebound in 2021 and from 2022 onward to settle closer to Viet Nam’s long-term growth rate between 6.0%-7.0%.
During the discussion between the Ministry of Finance and competent agencies with S&P during the sovereign rating review in late April, Viet Nam has exchanged and provided concrete evidences to demonstrate the resilience of the economy in this challenging global environment. Further to the effective containment of the COVID-19 pandemic domestically, Viet Nam has proactively carried out practical activities in assisting, collaborating and experience sharing with nations and international organizations which has been highly praised by the international community. This outcome reflects the deep social compact between the government and citizens, laying foundations for a strong, sustained and socially inclusive recovery of the economy from the outbreak and affirming Viet Nam’s strong external position.
Globally, since just beginning of April 2020, S&P has negatively adjusted the ratings and outlooks to 32 nations in which 10 nations are downgraded and 22 nations’ outlooks are negatively revised.
Given the effective containment of the pandemic in Viet Nam against the complex developments worldwide, the rating and outlook affirmation by S&P is a remarkable result, demonstrating S&P’s trust in Viet Nam’s institutional settings which consistently promote development achievements in the medium term and support broad-based improvements in income levels and quality of life.
The Ministry of Finance and competent agencies will continue to implement coordinated measures to ensure macroeconomic stability, support economic growth and enhance Viet Nam’s financial strength to improve the sovereign credit ratings./.