National credit rating improvement to help lure more foreign capital

A view of Ho Chi Minh City - Illustrative image (Photo: VNA)

The Ministry of Finance has coordinated with relevant agencies to complete a report on the development the National Credit Rating Improvement Project for the 2021-2030 period to submit to the Prime Minister for approval.

International credit institutions remain optimistic about Vietnam's prospects for 2022. They said that by improving the credit rating, Vietnam may attract more and more international capital inflows.

The roadmap to improve Vietnam's credit ratings to reach investment grade in the next 10 years will include a combination of quantitative and qualitative objectives, along with maintaining credit health in the process of realising growth potential and strengthening external financial position as recognised by credit rating agencies.

Karby Leggett, Global Head, Public Sector and Development Organizations at Standard Chartered Bank (Photo: Standard Chartered)

Karby Leggett, Global Head, Public Sector and Development Organizations at Standard Chartered Bank, said he believes that transforming the current positive credit outlook into credit rating events would be Vietnam's next step in its progress towards an investment rating.

International credit institutions said factors that will support Vietnam in improving its national credit rating include maintaining a high and sustainable growth rate through increasing investment capital and strengthening external financial position, improving the public financial situation through stabilising medium-term debt, increasing budget revenue and reducing the risk of contingent liability from the banking system.

Ngo Dang Khoa, country director of Foreign Exchange at Capital Markets and Securities Services at HSBC Vietnam, said since Vietnam joined the group of lower-middle-income countries, official development assistance (ODA) sources and concessional loans have gradually decreased and are expected to end in the near future.

If Vietnam fulfills the goals set for the 5-year socio-economic development plan in the 2021-2025 period, the country can join the group of upper-middle-income countries in the next 4 -5 years, Khoa said.

To be able to achieve the prospect of Vietnam’s “investment” credit rating in the period of 2021-2030, Vietnam needs to pay attention to expanding access to international capital markets and international commercial loans, and attracting foreign investors, he noted.

Raising Vietnam’s credit rating is of strategic significance, helping improve the efficiency of foreign capital mobilization or issuance of bonds to the international market.

Khoa expressed his belief that Vietnam's economic growth may reach 6.8 percent in 2022, when the vaccine coverage rate is high and the booster vaccination plan is being implemented urgently.

According to Khoa, to achieve its goal of credit rating improvement, Vietnam’s macroeconomic management policies need more tools to forecast and minimise external negative impacts in order to ensure growth of the economy, while per capita income needs to be improved as the plan set by the Government./.