Vietnam has received its latest recognition as a global leading economy from Fitch Ratings, one of the world’s three credit rating agencies. Vietnam won a sovereign rating upgrade with strong performing foreign-exchange reserve and economic growth. The upgrade places the nation closer to investment grade, ahead of its Southeast Asian neighbors.

The rating on the nation’s foreign currency dominated debt was raised one level to BB from BB- with a stable outlook. The upgrade will put Vietnam into a higher speculative grade expected to increase its growth on the stock market.

The gross domestic product of Vietnam grew by a 6.8% from last year and 6.2% from 2016 with exports supporting the manufacturing and services sectors. On average, the GDP growth has reached around 6.2% in the past five years, a 3.4% higher than countries with BB ratings from Fitch. It is expected that this year, the GDP growth will reach 6.7% with a large number of international partnerships initiated by the government and a strong flow of foreign direct investment to increase room for growth for both public and private business sectors. Vietnam remains the fastest growing economy in the Asia-Pacific region and fastest among ‘BB’ rated peers.

In addition, Vietnam’s external factors has increase a capital injection into the nation and a rising foreign-exchange reserve. Reserves are forecast to climb to about US $66 billion by the end of this year from 49 billion USD in 2017, increasing by approximately US $38 billion. Government debt would likely decline to below 50 percent of gross domestic product by 2019 according to Fitch’s calculation. The budget deficit is estimated to narrow to about 4.6 percent of GDP in 2018 from about 4.7 percent in 2017.

Source: AAStocks