Vietnam has good growth momentum: Fitch forum
Updated : Saturday, June 09, 2018 10:07 AM (GMT+0700)

The Vietnamese economy is enjoyingstronger growth compared to 2017 with increasing foreign reserves and tightcontrol of foreign debt, said Fitch experts at the “Fitch on Vietnam” forumheld in Hanoi on June 8.

Experts discussed at the Fitch on Vietnam forum - Photo: VNA

Speakingat the event, Sagarika Chandra, senior analyst at Fitch Vietnam, said in May2018, Fitch had improved Vietnam’s Long-Term Foreign-Currency Issuer DefaultRating (IDR) rating from BB- to BB with a stable outlook, thanks to a rise inforeign exchange reserves and strong economic growth. 

Vietnamrecords a high growth rate in comparison to emerging economies or otherBB-ranked nations, she said.

Thecountry’s GDP growth was above 6 percent in 2017 and is expected to reach 6.7percent in 2018 and following years, she noted, adding that this was one of theimportant factors that helped improve Vietnam's rating.

Accordingto the expert, the rating is a result of the country’s maintenance ofmacroeconomic stability, stronger resilience to external risks and compliancewith financial criteria. The Vietnamese government promulgated a flexibleexchange rate mechanism in early 2016, and committed to limiting national debtas well as to restructuring state-owned enterprises. Among those factors,sustainable macroeconomic performance and increased foreign reserves are thetwo most important elements of Fitch's rating.

Fitchforecasted the Vietnamese economy could grow 6.7 percent in 2018, makingVietnam one of the fastest growing economies in Asia-Pacific and the fastestamong BB-rated countries.

CanVan Luc, chief economist of the Investment Bank for Development of Vietnam(BIDV), said Vietnam sees a positive economic outlook with recognition of manyinternational organisations. The World Bank has also revised up Vietnam'seconomic growth forecast to 6.8 percent from the previous 6.5 percent, headded.

Lucsaid two other factors making the economy more attractive is the fast expansionof private sector consumption, which increased by about 10 percent in the pastyear, and the surge in private investment besides the inflow of foreigncapital.

SebastianEckardt, the World Bank's Lead Economist for Vietnam, highlighted a number ofrisks and challenges to Vietnam in future.

Hesaid the economy is highly open, making it vulnerable to impacts of externalfactors such as trade fights, higher oil prices, and geopolitical instability.

Inaddition, the tightened monetary policy adopted by many state banks is expectedto exert great impacts on the world economy and Vietnam will not be spared, hesaid.

Source: VNA

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