Vietnam has received its first investment-grade credit rating from Japanese agency Rating and Investment Information (R&I), which upgraded the country's foreign-currency issuer rating from BB+, with a positive outlook, to BBB-, with a stable outlook, on October 8, according to the Ministry of Finance.
The ministry said the upgrade reflected R&I's positive assessment of Vietnam's economic growth fundamentals, prospects for structural reform, fiscal headroom and resilience to external shocks.
R&I expects strong growth to continue as Vietnam shifts towards a model driven by productivity and innovation, expands public investment and attracts foreign direct investment.
During its sovereign credit assessment in April and May, the Ministry of Finance worked with other government agencies and engaged directly with R&I, providing updated information on Vietnam's macroeconomic and fiscal conditions, public debt and reform progress. The ministry drew on its experience working with international rating agencies Moody's, Fitch and S&P.
R&I said Vietnam had maintained strong growth, outperforming other Southeast Asian economies. Government reforms aimed at streamlining the state apparatus, promoting the private sector, strengthening institutions and developing capital markets were expected to bolster the country's growth potential and economic resilience.
The agency welcomed the broad reform programme and said consistent implementation would help Vietnam sustain high growth more reliably over the longer term.
On public finances, R&I noted that Vietnam's public debt-to-GDP ratio remained relatively low, leaving room to increase development investment. Although the budget deficit and public debt ratio are expected to rise, the agency said debt sustainability was not a major concern, as higher public investment was expected to support future growth while the government sought to control recurrent spending.
On the external front, the agency highlighted Vietnam's continued current-account surplus, sustained foreign direct investment inflows and relatively low external debt burden as factors supporting resilience to global shocks.
However, R&I also flagged risks that warrant attention, including credit growth, banking-sector liquidity, property lending, the financial system's capacity to provide sufficient capital and the level of foreign exchange reserves.
The upgrade comes amid continued volatility and uncertainty in the global economy. The Ministry of Finance described Vietnam's first investment-grade rating from an international credit rating agency as an important milestone in the country's efforts to strengthen its sovereign creditworthiness and advance economic reforms.
The ministry said the rating reflected Vietnam's solid macroeconomic foundations, sustained efforts to achieve high and sustainable growth, prudent public debt management and far-reaching reforms. It added that the upgrade would strengthen investor confidence and improve access to long-term financing for socio-economic development.
The ministry and other government agencies will continue working closely with R&I and other credit rating agencies, providing timely and comprehensive information on Vietnam's socio-economic conditions, public finances and debt to ensure future assessments are based on accurate, up-to-date data.