VietNamNet Bridge – Credit rating firm Fitch has revised Vietnam’s credit outlook to Positive from Stable due to economic movements in the past time.

Illustrative image (Photo: VNA)

Fitch’s report on January 23 gave Vietnam’s Long-Term Foreign- and Local-Currency Issuer Default Rating (IDR) a “B+”. The Outlooks on the Long-Term IDR s were revised from Stable to Positive.

The Country Ceiling was put at “B+” and the Short-Term Foreign Currency IDR at “B”.

The revision of the Outlook on Vietnam’s IDRs was based on an improvement in macroeconomic stability. The firm said the country’s economy has begun to recover following a difficult period after austerity measures were implemented in early 2011 under Resolution 11 to cool an overheated economy.

Vietnam’s Gross Domestic Product (GDP) grew 5.4 percent in 2013 and Fitch forecasts the rate would be 5.7 percent and 5.9 percent in 2014 and 2015 respectively.

Also according to Fitch, Vietnam had a large current account surplus of 5 percent of GDP in 2013 while strong foreign direct investment (FDI) inflows, at 6.8 percent of GDP in 2013, continue to assist the expansion in the manufacturing/export sector.

However, the banking sector remains a source of weakness, Fitch’s report said, adding that it believed the authorities have begun to address the bad debt issue by creating a national asset management company.

The firm assumes that Vietnam will continue with policies aimed at achieving macroeconomic stability, sustainable GDP growth, low and stable inflation, and healthier current account balances.

Source: Vietnam Plus