Fitch sees bright future for Viá»t Nam
Fitch sees bright future for Viá»t NamUpdate: June, 09/2018 - 08:00
|According to Fitchâs forecast, Viá»t Nam will âremain among the fastest-growing economies in the Asia-Pacific region, and fastest among âBBâ rated peers. â" VNA/VNS Photo VÅ© Sinh|
HÃ Ná»I â" Viá»t Namâs economy is on a more positive growth momentum than last year, with strong foreign direct investment (FDI) capital inflows, increased foreign exchange reserves and strictly controlled foreign debts, according to Fitch Ratings.
At the âFitch on Vietnamâ forum held in HÃ Ná»i on Friday, Sagarika Chand ra, Fitchâs associate director and primary sovereign analyst for Viá»t Nam, said Fitch Ratings last month upgraded Viá»t Namâs long-term foreign-currency issuer default rating (IDR) to âBBâ from âBB-â with a stable outlook, thanks to the countryâs improved external buffers and strong macroeconomic performance.
Compared to other emerging countries as well as other âBBâ rated peers, Viá»t Nam currently has a high growth rate, Chandra said, adding that the countryâs GDP (gross domestic product) growth accelerated to 6.8 per cent in 2017 and looks set to grow by another 6.7 per cent this year.
This is one of the important factors in upgrading Viá»t Namâs credit rating, she added.
Besides, the countryâs macroeconomic stability, a cushion against external shocks and satisfaction in certain financial criteria were also key drivers for Fitchâs upgrading to Viá»t Nam, she said, adding that the Vietnamese Government adopted a fl exible exchange-rate mechanism in January 2016 besides pledging to limit the national debts and restructuring State-owned enterprises (SOEs).
According to Fitchâs forecast, Viá»t Nam will âremain among the fastest-growing economies in the Asia-Pacific region, and fastest among âBBâ rated peers.
At the forum, many experts also pointed out that Viá»t Namâs economy has several internal and external strengths, ranging from capital inflows, labour and productivity in the agricultural, processing and manufacturing sectors, which creates a sustainable structure.
Cáº¥n VÄn Lá»±c, chief economist of the Bank for Development Investment of Vietnam (BIDV), said that the Vietnamese economy has many positive outlooks with the recognition of international organisations such as the World Bank (WB) that has recently also raised its outlook for Viá»t Namâs economic growth to 6.8 per cent from the previous forecast of 6.5 per cent.
According to Lá»±c, increase in the private sector spending (at about 10 per cent in the past year) and the private investment capital source are also causes making Vietnamese economy more attractive.
In addition to positive factors, Sebastian Eckardt, lead economist of the World Bank in Viá»t Nam, pointed out some risks and challenges for the countryâs economy in the coming time.
With a highly open economy, Viá»t Nam is likely to be exposed to external factors, such as trade wars, high oil prices or geopolitical instability, he said.
In addition, tightened monetary policies of central banks will also have a great impact on the worldâs economy and of course, Viá»t Nam is not out of the circle of influence, he said. - VNS
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