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Investing.com -- Moody’s Ratings has affirmed Vietnam’s government issuer and senior unsecured ratings at Ba2 and maintained a stable outlook, according to an announcement made Thursday.
The rating affirmation highlights Vietnam’s high growth potential, improving macroeconomic stability, and attractiveness as a foreign investment destination. These factors provide resilience against potential negative credit implications from high U.S. tariffs on Vietnamese exports.
Despite Vietnam’s significant exposure to U.S. trade, with exports to the United States accounting for 26% of GDP in 2024, Moody’s does not expect major capital withdrawals or production relocations from Vietnam in its baseline scenario. The agency forecasts economic growth for Vietnam at 5.5% in 2025 and 5.0% in 2026, which remains strong compared to rating peers.
Vietnam’s attractiveness as an investment destination is supported by its competitive workforce, improving infrastructure, stable domestic politics, and business-friendly policies. The country’s multiple port facilities, growing network of free trade agreements, and expanding renewable energy capacity further cement its role in global supply chains.
Infrastructure upgrades, including renewable energy projects and major transportation developments like the North-South expressway expansion, are expected to enhance Vietnam’s status as a manufacturing and maritime hub.
Moody’s notes that Vietnam’s credit profile benefits from strong fiscal metrics, including low debt and high debt affordability. While fiscal deficits are estimated to widen to around 3.0-3.5% of GDP in the next 2-3 years due to weaker revenues and higher infrastructure spending, the debt burden is expected to remain lower than peers.
The stable outlook reflects a balance of risks. Downside risks include potentially higher U.S. tariffs and trade restrictions that could impact Vietnam’s attractiveness for foreign direct investment. These risks are partially offset by ongoing reforms initiated under To Lam’s leadership of the Communist Party of Vietnam since 2024, which aim to streamline bureaucracy and enhance administrative efficiency.
Moody’s would consider upgrading Vietnam’s rating if risks from a more restrictive trade environment recede while institutions and governance continue to improve. Conversely, a downgrade might occur if high U.S. tariffs severely impact Vietnam’s attractiveness to foreign capital and growth prospects.
Vietnam’s local and foreign-currency ceilings remain unchanged at Baa2 and Ba1 respectively.
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