The affirmation reflects the country’s strong external finance metrics relative to its peers in conjunction with continued strong medium-term growth prospects, despite the COVID-19 pandemic and the impacts of the conflict in Ukraine on the global economy.
In its report, Fitch Ratings recognised the rapid recovery of Vietnam’s economic activity as a result of the government’s flexible approach to the pandemic paired with a high vaccination rate among its adult population.
Fitch said that Vietnam’s export sector continues to benefit from the implementation of key trade agreements, a strong flow of foreign direct investment (FDI), and the gradual resumption of tourism inflow in 2022.
The ratings agency expects Vietnam’s economic growth to accelerate to 6.1% in 2022 and 6.3% in 2023, led by a recovery in domestic demand, strong exports and high FDI inflow.
Fitch ratings listed several factors that could lead to a positive rating action or upgrade, namely sustained high growth and macroeconomic stability, improvement in public finances, and a reduction in risks from weaknesses in the banking sector.
