Fitch Ratings has rated Vietnam 's Foreign and Local Currency Issuer Default Ratings (IDR) at 'B+' and the outlook for both is stable.
The country’s ceiling has also been rated 'B+' and the short term foreign currency IDR is at 'B'.
According to the Director of Fitch's Asia-Pacific Sovereign Ratings Group, Art Woo, the ratings and stable outlook reflect the success of Vietnam in tackling the macro-financial imbalances that arose in 2010 and 2011.
However, he added, despite recent signs of greater macroeconomic stability including a lower inflation rate, the stronger current account position and the Dong’s stable exchange rate, is further evidence that these changes have worked but reforming the banks and state-owned enterprises is needed to put pressure on Vietnam's sovereign ratings.
Since implementing its fiscal and monetary measures to restore macroeconomic stability under Resolution 11 in February 2011, Vietnam has made progress in cutting inflation, as CPI inflation grew by 10.5 percent year on year in April, down from a peak of 23 percent year on year in August 2011.
Fitch forecasts an average CPI inflation rate of 10 percent in 2012, much lower than the 18.7 percent in 2011.
The group also said that continuing with these measures will in turn create a more balanced macroeconomic environment, with lower inflation, stable GDP growth and a more stable balance of payments. This would be a positive development for the county’s sovereign ratings.-VNA
The country’s ceiling has also been rated 'B+' and the short term foreign currency IDR is at 'B'.
According to the Director of Fitch's Asia-Pacific Sovereign Ratings Group, Art Woo, the ratings and stable outlook reflect the success of Vietnam in tackling the macro-financial imbalances that arose in 2010 and 2011.
However, he added, despite recent signs of greater macroeconomic stability including a lower inflation rate, the stronger current account position and the Dong’s stable exchange rate, is further evidence that these changes have worked but reforming the banks and state-owned enterprises is needed to put pressure on Vietnam's sovereign ratings.
Since implementing its fiscal and monetary measures to restore macroeconomic stability under Resolution 11 in February 2011, Vietnam has made progress in cutting inflation, as CPI inflation grew by 10.5 percent year on year in April, down from a peak of 23 percent year on year in August 2011.
Fitch forecasts an average CPI inflation rate of 10 percent in 2012, much lower than the 18.7 percent in 2011.
The group also said that continuing with these measures will in turn create a more balanced macroeconomic environment, with lower inflation, stable GDP growth and a more stable balance of payments. This would be a positive development for the county’s sovereign ratings.-VNA
