S&P affirms Vietnam’s long-term rating outlook stable, predicts 5.8% economic expansion

By Tri Duc
Sat, June 22, 2024 | 2:22 pm GMT+7

S&P Global, the US-based credit rating agency, has affirmed a 'BB+' long-term sovereign credit rating and a 'B' short-term rating for Vietnam, adding that its long-term rating outlook is stable.

In a Thursday release, S&P Global says Vietnam's economy will accelerate over the next 12 months as global demand picks up and the country gradually resolves its domestic challenges.

“This should keep the government's debt repayment burden stable,” it says.

High-rise buildings in Hanoi. Photo courtesy of Nguoi Dua Tin (Messenger) magazine.

High-rise buildings in Hanoi. Photo courtesy of Nguoi Dua Tin (Messenger) magazine.

The sovereign ratings on Vietnam 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,” the report says.

It also mentions disadvantages including modest GDP per capita, banking sector vulnerabilities and evolving institutional settings.

5.8% GDP growth

Following Vietnam’s relatively lackluster GDP growth of 5.05% in 2023, S&P expects healthier global demand conditions to support an acceleration to 5.8% in 2024.

“Vietnam’s export-led economy relies on strong external demand, which is firming,” the report says.

The upcycle in the semiconductor industry will also play a role in propelling Vietnam's growth this year, as exports from the industry increase, it adds.

The report anticipates Vietnam’s GDP growth at 6.7% in 2025, 6.7% in 2026, and 6.7% in 2027.

It estimates the country’s nominal GDP to accelerate from $429.7 billion in 2023 to $452.4 billion in 2024, $479.7 billion in 2025, $521.5 billion in 2026 and $566.5 billion in 2027.

S&P forecasts Vietnam's GDP per capita at about $4,500 at the end of 2024. Trend growth, as measured by the country's 10-year weighted-average increase in real GDP per capita, of about 5% is significantly higher than the median of peers at a similar income level, it notes.

Vietnam remains an attractive destination for foreign investment, particularly in the manufacturing sector, as firms continue to diversify their operations in the region. The agency attributes Vietnam’s attractiveness to its macroeconomic stability and well-developed logistics network for exports, which can support the manufacturing sector's attractiveness for global firms in the electronics, mobile phone and textile industries.

Power blackouts amid a heatwave in mid-2023 are an indicator of strong demand for foreign investment in the country and the government has moved to “avert similar events in the future” by upgrading the infrastructure, the report observes.

Meanwhile, problematic issues in the country, including bureaucratic rigidities and a slowdown in the country's property sector, are being resolved gradually, it adds.

Comments (0)
  • Read More
Northern Vietnam province Bac Giang seeks faster progress on Aeon Mall project

Northern Vietnam province Bac Giang seeks faster progress on Aeon Mall project

A top leader of Bac Giang province has expressed his hope that Aeon Mall Vietnam, under Japanese retail giant Aeon Mall, would push ahead with its 7.7-hectare commercial center project in order to put it into operation as soon as possible.

Real Estate - Mon, May 12, 2025 | 4:50 pm GMT+7

Work starts on many major investment projects in northern Vietnam city Hai Phong

Work starts on many major investment projects in northern Vietnam city Hai Phong

Twelve key projects saw construction kick-start or inauguration on Sunday in the northern port city of Hai Phong.

Industries - Mon, May 12, 2025 | 4:13 pm GMT+7

Vietnam’s solar strategy for trade-tense times

Vietnam’s solar strategy for trade-tense times

Prime Minister Pham Minh Chinh on April 15 issued Decision 768 approving Vietnam's Amended National Power Development Plan VIII for 2021-2030, with vision to 2050. The decision reaffirms the government's commitment to renewable energy and positions the country as a regional frontrunner in the global energy transition, writes Dr Nguyen Vinh Khuong, a lecturer in electronic and computer systems engineering at RMIT Vietnam.

Consulting - Mon, May 12, 2025 | 2:36 pm GMT+7

Vietnam's pepper exports surge 58% in value despite lower volume

Vietnam's pepper exports surge 58% in value despite lower volume

Vietnam’s pepper exports in early 2025 saw a significant rise in value despite a drop in volume, thanks to sharp increases in export prices.

Companies - Mon, May 12, 2025 | 1:30 pm GMT+7

Vietnam’s chemical giant launches e-commerce platform

Vietnam’s chemical giant launches e-commerce platform

State-owned Vietnam National Chemical Group (Vinachem) unveiled its e-commerce platform VinachemMart in Hanoi on Saturday, a move demonstrating its bold green and digital transformation strategy.

Companies - Mon, May 12, 2025 | 1:24 pm GMT+7

Central Vietnam city Danang seeks investors for $69.3 mln semiconductor chip lab

Central Vietnam city Danang seeks investors for $69.3 mln semiconductor chip lab

Danang city is seeking investors for a VND1.8 trillion ($69.29 million) project to establish a laboratory dedicated to advanced chip packaging technology.

Industries - Mon, May 12, 2025 | 12:53 pm GMT+7

Vietnam’s private economy resolution requires different implementation approach: economist

Vietnam’s private economy resolution requires different implementation approach: economist

Resolution 68-NQ/TW, issued on May 4, 2025 by the Politburo - the country's supreme decision-making body, introduces breakthrough perspectives on the position and role of the private sector, says Dr. Nguyen Dinh Cung, former director of the Central Institute for Economic Management (CIEM),

Economy - Mon, May 12, 2025 | 9:38 am GMT+7

Vingroup subsidiary expects 17-fold surge in net profit

Vingroup subsidiary expects 17-fold surge in net profit

Vietnam Exhibition Fair Centre JSC (VEF), a subsidiary of conglomerate Vingroup, said it targets to rake in a net profit of VND16 trillion ($615.89 million) in 2025, nearly 17 times higher than last year’s figure.

Companies - Mon, May 12, 2025 | 8:22 am GMT+7

Vietnam, Russia sign cooperation agreements in diverse sectors

Vietnam, Russia sign cooperation agreements in diverse sectors

Vietnam’s Party General Secretary To Lam and Russian President Vladimir Putin witnessed the exchange of cooperation documents between the two countries following their Moscow summit meeting on May 10.

Politics - Sun, May 11, 2025 | 10:28 pm GMT+7

Russian heavyweights seek opportunities in Vietnam's energy, high-tech fields

Russian heavyweights seek opportunities in Vietnam's energy, high-tech fields

Prominent Russian companies Zarubezhneft, AFK Sistema, and Positive Technologies are seeking investment opportunities in energy and high technology in Vietnam.

Industries - Sun, May 11, 2025 | 10:16 pm GMT+7

Vietnam, Russia adopt major orientations to chart course for bilateral ties

Vietnam, Russia adopt major orientations to chart course for bilateral ties

Vietnam and Russia have adopted a Joint Statement on major orientations to chart course for bilateral relations on the occasion of Party General Secretary To Lam's official visit to Russia from May 8-11.

Politics - Sun, May 11, 2025 | 9:18 pm GMT+7

Vietnam's leading tour operator Vietravel before capital hike: Revenue grows, profit shrinks

Vietnam's leading tour operator Vietravel before capital hike: Revenue grows, profit shrinks

Ho Chi Minh City-based Vietravel has seen strong revenue growth over the past three years on the tourism industry's post-pandemic recovery, but its profit has continued to decline, with a profit margin of only around 0.5%.

Companies - Sun, May 11, 2025 | 1:34 pm GMT+7

Central Vietnam province Binh Dinh to select solar, wind power investors via tender

Central Vietnam province Binh Dinh to select solar, wind power investors via tender

Vietnam’s central coastal province of Binh Dinh has allocated land plots for 22 projects, including eight for solar, wind, and geothermal power development, that will seek investors via tender.

Energy - Sun, May 11, 2025 | 11:39 am GMT+7

Vietnam's Party chief holds talks with Russian President Putin, agreeing on major orientations for bilateral ties

Vietnam's Party chief holds talks with Russian President Putin, agreeing on major orientations for bilateral ties

Vietnam's Party chief To Lam held talks with Russian President Vladimir Putin at the Kremlin Palace in Moscow on Saturday (local time), within the framework of his official visit to Russia.

Politics - Sun, May 11, 2025 | 8:20 am GMT+7

Policy support for private enterprises poised to drive Vietnam’s stock market

Policy support for private enterprises poised to drive Vietnam’s stock market

Amid global uncertainties and complex geopolitical shifts, financial experts believe that Vietnam’s new Resolution 68 on private sector development, signed by the Politburo on May 4, could become a significant catalyst for the domestic stock market.

Economy - Sun, May 11, 2025 | 8:00 am GMT+7

Malaysia develops data centers to become technology nation

Malaysia develops data centers to become technology nation

The data center sector can be a catalyst for Malaysia to become a technology nation, said Deputy Minister of Investment, Trade and Industry Liew Chin Tong.

Southeast Asia - Sat, May 10, 2025 | 11:03 pm GMT+7