(VOVWORLD) - S&P Global Ratings affirmed its 'BB+' long-term and 'B' short-term sovereign credit ratings on Vietnam, with a “stable” outlook on the long-term rating, the website disclosure.spglobal.com reported on Thursday.
The American agency forecast that Vietnam's economy will accelerate over the next 12 months as global demand picks up and the country gradually resolves its domestic challenges.
It highlighted that the ratings reflect the country's strong economic growth outlook, moderate government debt levels, and generally sound external position.
As multi-national conglomerates diversify their operations in the region, Vietnam will likely continue to attract substantial foreign direct investment (FDI) inflows to its export manufacturing sector over the next several years. It predicted that Vietnam's economic growth will pick up to 5.8% this year, after cooling to 5% in 2023.
The upcycle in the semiconductor industry is expected to play a role in propelling Vietnam's growth this year, as exports from the industry increase.
On the services side, cross-border travel is recovering, including a surge in Chinese tourists. Domestic demand is also recovering, though it remains slower than headline GDP growth. S&P expected public investment to gradually accelerate over the coming years, primarily from the State budget.
Over the next three to four years, Vietnam's real GDP growth rate was expected to return to its long-term trend of 6.5%-7%. Despite the immediate stresses, Vietnam's economic prospects remain healthy, it said.