Moody’s upgrades Vietnam’s ratings to Ba2, outlook to stable (Illustration: chinhphu.vn)

The Ministry said the upgrade to Ba2 reflects the assessment by Moody's that Vietnam's economy has growing strengths and greater resilience to external macroeconomic shocks that are indicative of improved policy effectiveness.
Moody's expects the situation will continue as the economy benefits from supply chain reconfiguration, export diversification, and continued inbound investment in manufacturing.

According to Moody's assessment, Vietnam's economic strength is underpinned by enhanced competitiveness and greater participation in global value chains.  Increased competitiveness in VN’s manufacturing and processing sectors demonstrates its superior performance compared to other countries of the same rank in the region and has contributed to boosting people's incomes. Vietnam's participation in bilateral and regional trade agreements has bolstered its expanding position in the global value chain. Moody's believes these Free Trade Agreements will improve Vietnam's competitiveness for a list of goods with lower added value, at the same time consolidating Vietnam's position in the supply chain for high value-added technology products. 

Fiscal policy effectiveness has improved, with a greater emphasis on medium-term budget planning and domestic, low-cost financing sources. The National Assembly has lowered the statutory public debt ceiling to 60% of GDP to better anchor debt levels while preserving fiscal flexibility during the ongoing economic recovery.  Vietnam is one of four countries globally and the only Asia-Pacific to have its rating upgraded by Moody’s since early this year.