Fitch Ratings has forecast Vietnam’s growth in the medium term at around 7%. (Photo: VNA) In a report released recently, the agency said Vietnam’s cost competitiveness, educatedworkforce compared with peers, and entry into numerous regional and global freetrade agreements (FTAs) should bode well for continued strong FDI inflows,particularly in the context of ongoing global supply chain diversification.
It cited statisticsshowing realised FDI in Vietnam last year was 22.4 billion USD (about 6% ofGDP), up from 19.7 billion USD in 2021, and realised FDI until November 2023was 20.2 billion USD.
The upgrade of theVietnam-US relationship to a comprehensive strategic partnership in September couldfacilitate greater US FDI flows into and trade with Vietnam, according to thereport.
The agency also noted theimprovement of external finances, saying Vietnam’s foreign exchange reserves asof end-September 2023 reached 89 billion USD, after a sharp decline in 2022.
It has upgraded Vietnam’s Long-Term IssuerDefault Ratings (IDRs) to 'BB ', which it said reflects the country’s favourable medium-term growth outlook.
The outlook isunderpinned by robust FDI inflows, that the agency expects will continue todrive sustained improvements in Vietnam’s structural credit metrics.
“We have increasingconfidence that near-term economic headwinds from property-sector stresses,weak external demand and delays in policy implementation owing to a corruptioncrackdown are unlikely to affect medium-term macroeconomic prospects and thatpolicy buffers are sufficient to manage near-term risks,” Fitch said./.
VNA
