Vietnam has received a sovereign credit rating upgrade from Fitch Ratings, moving from BB to BB+ with a stable outlook. This upgrade is based on the country’s favourable medium-term growth outlook, driven by robust foreign direct investment (FDI) inflows.
The Vietnamese government is actively working to strengthen the economy, aiming for a GDP growth of 6% to 6.5% in 2024. Fitch anticipates medium-term growth at around 7%, fuelled by Vietnam’s cost competitiveness, educated workforce, and participation in regional and global free-trade agreements, attracting strong foreign investment amid global supply chain diversification.
Foreign-exchange reserves improved to $89 billion as of September, with expectations for further improvement in 2024-2025. However, challenges in the property sector and slower economic growth have impacted loan demand, with some highly leveraged firms facing possible refinancing risks. Despite this, Fitch notes that many banks are likely to refinance qualified borrowers to avoid wider defaults and losses.