The ratings on Vietnam's senior unsecured foreign-and local-currency bonds were also affirmed at 'BB-'. The country ceiling stands at 'BB-' and the short-term foreign-and local-currency IDRs at 'B'.
Vietnam’s ratings reflect strong growth performance and prospects, persistent current account surpluses, manageable debt service costs and sustained foreign direct investment (FDI) inflows.
Explaining its revision of Vietnam’s outlook to positive, the New York-based credit rating agency said the country is building a record of policy-making focused on macroeconomic stability. This approach, which includes greater exchange-rate flexibility and an increasing focus on inflation stability, has supported consistently strong levels of FDI and helped maintain robust economic growth.
Vietnam’s economy expanded by 6.2% last year, taking the five-year average gross domestic product (GDP) expansion to 5.9% against the 'BB' median of 3.4%.
Growth remains supported by the country's export-oriented manufacturing sector and steady expansion in services, despite weakness in the mining and quarrying sectors from the ongoing oil and gas industry downturn.
Fitch expects real GDP growth to improve gradually over the forecast period to 6.3% this year and 6.4% next, supported by continued FDI inflows into the manufacturing sector and strong private consumption expenditure.
As for the 'BB-' rating, it said Vietnam’s government debt is above the 'BB' median and has continued to rise.
According to preliminary estimates by the authorities, government debt accounted for 53.4% of GDP at the end of 2016, rising from 50.1% the year before.