Fitch revises Vietnam’s outlook from stable to positive


Fitch has revised Vietnam’s long-term foreign and local currency issuer default ratings outlook to positive from stable.

The rating agency said in a statement January 23 that it affirms Vietnam’s long-term foreign and local currency IDR at ‘B+’. The ratings for the country’s senior unsecured foreign- and local-currency bonds are also ‘B+’.

The country ceiling was affirmed at ‘B+’ and the short-term foreign currency IDR at ‘B’.

According to Fitch, the revision of the outlook to positive from stable was driven by an improvement in macroeconomic stability.

It said Vietnam’s economy has begun to recover following a difficult period after austerity measures were implemented in early 2011 under Resolution 11 to cool an overheated economy.

Real GDP grew 5.4 percent in 2013 (5.2 percent in 2012) as both domestic and external demand picked up.

Fitch forecast real GDP to grow at 5.7 percent and 5.9 percent in 2014 and 2015 respectively.

Meanwhile, inflation moderated to 6.6 percent in 2013 compared with 9.1 percent in 2012 and 18.7 percent in 2011.

Another reason for the revision was that the country’s external finances have strengthened. Fitch estimated that Vietnam recorded another large current account surplus of 5 percent of GDP in 2013 (5.8 percent in 2012).

Strong foreign direct investment inflows, at 6.8 percent of GDP in 2013, continued to underpin the expansion in the manufacturing/export sector.

But foreign-exchange reserves stood at US$28.6 billion at end-December (US$26.1 billion at end-2012), or equivalent to 2.4 months of current external payments, not a large buffer given Vietnam has experienced episodes of significant capital flight in recent years.

The banking sector remains a source of weakness for Vietnam’s credit profile due largely to a high but unknown level of non-performing loans (NPLs).

The implementation of Circular 2, which will apply stricter rules in classifying and provisioning for NPLs has been delayed until June 2014.

But the authorities have begun to address the issue by creating a national asset management company to help resolve NPLs.




Source : Thanh Nien Daily | January 28, 2014


About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
This entry was posted in Business, Economy, Global Sourcing and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s