Fitch Ratings forecasts Viet Nam’s favorable medium-term growth at 7%
VGP - Credit rating agency Fitch Ratings forecast Viet Nam’s growth rate in the medium term at around 7 percent, with many favorable signs.
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Fitch Ratings said Viet Nam’s cost competitiveness, educated workforce compared with peers, and entry into numerous regional and global free trade agreements (FTAs) would enable the country to attract the strong FDI inflows, particularly in the context of ongoing global supply chain diversification.
The amount of FDI disbursement in Viet Nam was US$22.4 billion (about 6 percent of GDP), up from US$19.7 billion in 2021 and was US$20.2 billion as of November 2023.
The upgrade of the Viet Nam-US relationship to a comprehensive strategic partnership in September is expected to enable FDI flows into and trade with Viet Nam.
The rating agency upgraded Viet Nam’s Long-Term Issuer Default Ratings (IDRs) to 'BB', which it said reflects the country’s favorable medium-term growth outlook.
“The upgrade of Viet Nam’s long-term Issuer Default Ratings to ‘BB+’ reflects its favorable medium-term growth outlook, which is underpinned by robust FDI, that we expect will continue to drive sustained improvements in its structural credit metrics,” Fitch Ratings said.
The agency said it has increasing confidence that near-term economic headwinds from property-sector stress, weak external demand, and other factors are unlikely to affect the country’s medium-term macroeconomic prospects and that policy buffers are sufficient to manage near-term risk.
Near-term economic headwinds from property-sector stresses, weak external demand and delays in policy implementation owing to a corruption crackdown are unlikely to affect medium-term macroeconomic prospects and that policy buffers are sufficient to manage near-term risks,” Fitch said.
Earlier, Standard Chartered Bank maintained robust 2024 GDP growth forecast of 6.7 percent for Viet Nam in its latest macro-economic updates about the Southeast Asian nation.
The International Monetary Fund (IMF) also expressed their optimism about the medium-term prospects, with the national GDP growth forecast to reach 5.8 percent in 2024 and 6.9 percent in 2025.
The 15th National Assembly (NA) on November 9 adopted a resolution on the socio-economic development plan for 2024, targeting the GDP growth of 6.0 - 6.5 percent for next year./.
