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| Workers produce electronic components at Nidec company. The rating agency S&P keeps a stable outlook on Viet Nam. Photo baohaiquan.vn |
HA NOI (Biz Hub) — Global ratings firm Standard & Poor's (S&P) has retained its BB- long term and B short term sovereign credit ratings on Viet Nam, and said the country's outlook was stable.
It also affirmed a BB- issue rating on Viet Nam's senior unsecured bonds and axBB+ long term and axB short term ASEAN regional scale rating on the country. The transfer convertibility assessment remains graded as BB-.
According to S&P, the ratings on Viet Nam reflect its low-income economy, its weak fiscal position, a developing monetary and financial framework and the possibility that its evolving policy framework could weaken sovereign risk indicators.
"Viet Nam's macroeconomic conditions reflect the Government's policy choices which emphasise stability and the need to address structural shortcomings in the banking and State-owned sectors in particular," said S&P credit analyst Agost Benard.
"Stabilisation measures undertaken since 2011 have considerably reduced macroeconomic imbalances, improved confidence in the local currency, and led to somewhat greater perceived policy credibility."
S&P said Viet Nam is supported by a moderate and improving external position, with sovereign external borrowings remaining modest and at a low cost and long maturity. They projected that the gross external debt of the country will remain below 50 per cent of the gross domestic product (GDP) during the next three years.
The ratings agency expected Viet Nam will maintain an appropriately tight economic policy stance that allows reform of banks and other sectors to progress while maintaining macroeconomic stability. — VNS