(Photo: VNA)

According to the Ministry of Finance, the S&P upgrade shows the economy is on a solid recovery track following the government’s decisions to ease domestic COVID-19 restrictions and reopen its borders to the world as well as due to its impressively improved vaccination and a flexible shift in COVID-19 control policy.

A marked improvement in administrative reform, especially related to external debt burden management, a strong economic outlook, a firm international position, and a robust FDI inflow are important factors that further support the rating.

The ‘Stable’ outlook in the next 12-24 months S&P forecast indicates that the Vietnamese economy would continue to recover and overcome difficulties caused by the pandemic over the past two years, helping consolidate its international position and control the budget deficit.

S&P also noted that Vietnam’s per capita income has increased rapidly in recent years with a 10-year growth rate of 4.8%, which significantly higher than the average of countries with similar income levels.

This agency also projected that the Vietnamese economy would expand approximately 6.9% in 2022 and between 6.5% - 7% from 2023. Macroeconomic stability along with competitive advantages in labor, improved educational standards and favorable demographics are key drivers of increasing the attractiveness of the manufacturing sector to global firms, fueling export growth and local consumption.

The Ministry of Finance said S&P raising Vietnam's sovereign credit rating amid global uncertainties shows the international community's appreciation for Vietnam’s efforts to stabilize and restore the macro-economy, and strengthen the socio-political foundation.