Hanoi (VNA)– Moody’s Investor Services projected Vietnam’s annual GDP growth to stay at around6.4 percent during the 2018-2022 period in its latest report issued on August10.

Moody’s estimates thatVietnam’s growth potential is strong, at around 6.5 percent, supported by the increasinglyefficient use of labour and capital in the economy. The country’s economicstrength combines high growth and high competitiveness as shown in the economy’songoing shift towards high value-added sectors.

With an average GDP growth rate of over 6 percent over thepast decade, Vietnam has climbed up the manufacturing value chain over only ashort span of time, gaining competitiveness in the assembly of highervalue-added electronic products (such as smartphones) while continuing toretain its comparative advantage in the export of labour-intensive goods (suchas textiles and garments). Rising competitiveness and further transitiontowards higher value-added industrial activity will support growth at highlevels in the medium term, the firm said. 

Moody’s has upgraded the Government of Vietnam’s long-termissuer and senior unsecured ratings from B1 to Ba3 and changed the outlook frompositive to stable.

According to the company, a long average maturity of governmentdebt and a diminishing reliance on foreign-currency debt point to a stable andgradually moderating government debt burden, particularly if strong growth issustained over time. The structure of Vietnam's government debt also limitssusceptibility to financial shocks. The upgrade also reflects improvements inthe health of the banking sector that Moody's expects to be maintained, albeitfrom relatively weak levels.

The firm has alsoraised Vietnam’s long-term foreign currency (FC) bond ceiling from Ba2 to Ba1,and its long-term FC deposit ceiling from B2 to B1.

Moody's InvestorsService is a leading provider of credit ratings, research, and risk analysis.The firm's ratings and analysis track debts covering more than 135 sovereignnations, approximately 5,000 non-financial corporate issuers, 4,000 financialinstitutions issuers, 18,000 public finance issuers, 11,000 structured financetransactions, and 1,000 infrastructure and project finance issuers. –VNA