VIỆT NAM TARGETS INVESTMENT-GRADE SOVEREIGN CREDIT RATING BY 2030

Việt Nam aims to achieve a rating of at least Baa3 from Moody’s or BBB- from S&P and Fitch by 2030.

The core area of Việt Nam International Financial Centre in HCM City. Improving the sovereign rating is critical for Việt Nam to enhance the country's international standing, facilitate its access to capital and reduce borrowing costs and sovereign credit risk. — VNA/VNS Photo Hồng Đạt

HÀ NỘI — Việt Nam has revised the plan to improve its sovereign credit rating which sets a target of reaching investment-grade status by 2030 while linking the effort more closely to economic growth, innovation, digital transformation and fiscal sustainability.

Deputy Prime Minister Nguyễn Văn Thắng has signed Decision 1919/QĐ-TTg amending the Government’s 2022 scheme on improving the country’s sovereign credit rating through 2030.

Under the revised plan, Việt Nam aims to achieve a rating of at least Baa3 from Moody’s or BBB- from S&P and Fitch by 2030.

The Government said improving the sovereign rating is critical for Việt Nam to enhance the country's international standing, facilitate its access to capital and reduce borrowing costs and sovereign credit risk.

The revised scheme sets an average annual GDP growth target of at least 10 per cent for 2026-30, with GDP per capita expected to reach about US$8,500 by 2030.

Total social investment is targeted at around 40 per cent of GDP on average during the period, with public investment accounting for 20-22 per cent.

On fiscal policy, the Government aims to keep the average state budget deficit at around 5 per cent of GDP during 2026-30, while public debt would remain below 60 per cent of GDP and government debt below 50 per cent.

The plan calls for a stronger and more sustainable public finance system, broader revenue sources and tighter management of public debt.

The revised scheme also targets stronger resilience of the banking sector. Minimum capital adequacy ratios at commercial banks are expected to move towards Basel III standards and reach 8.625 per cent by 2030 at the latest.

Credit policy will be aligned with macro-economic and monetary-market developments, with lending directed towards production, priority sectors and key growth drivers while risks in potentially vulnerable areas are closely controlled.

The plan also places greater emphasis on improving the financial structure and quality of State-owned enterprises (SOEs) to reduce potential fiscal risks.

SOEs will be encouraged to invest in science and technology, innovation, digital and green transformation, while reforms will focus on corporate governance, restructuring and the management of State capital.

Việt Nam will also develop a system to compile, monitor and analyse its international investment position (IIP), with the data to be made available to sovereign credit-rating agencies when requested.

The revised plan also covers measures to respond proactively to climate change and natural disasters, strengthen resource and environmental management, improve resilience to external risks through market diversification and energy security, and gradually integrate environmental, social and governance (ESG) factors into national governance in line with evolving sovereign credit-rating criteria.

Moody’s in May affirmed Việt Nam’s Ba2 rating but raised its outlook to positive from stable, still below investment-grade status. — VNS

Source: VNS

Việt Nam aims to achieve a rating of at least Baa3 from Moody’s or BBB- from S&P and Fitch by 2030.

The core area of Việt Nam International Financial Centre in HCM City. Improving the sovereign rating is critical for Việt Nam to enhance the country's international standing, facilitate its access to capital and reduce borrowing costs and sovereign credit risk. — VNA/VNS Photo Hồng Đạt

HÀ NỘI — Việt Nam has revised the plan to improve its sovereign credit rating which sets a target of reaching investment-grade status by 2030 while linking the effort more closely to economic growth, innovation, digital transformation and fiscal sustainability.

Deputy Prime Minister Nguyễn Văn Thắng has signed Decision 1919/QĐ-TTg amending the Government’s 2022 scheme on improving the country’s sovereign credit rating through 2030.

Under the revised plan, Việt Nam aims to achieve a rating of at least Baa3 from Moody’s or BBB- from S&P and Fitch by 2030.

The Government said improving the sovereign rating is critical for Việt Nam to enhance the country's international standing, facilitate its access to capital and reduce borrowing costs and sovereign credit risk.

The revised scheme sets an average annual GDP growth target of at least 10 per cent for 2026-30, with GDP per capita expected to reach about US$8,500 by 2030.

Total social investment is targeted at around 40 per cent of GDP on average during the period, with public investment accounting for 20-22 per cent.

On fiscal policy, the Government aims to keep the average state budget deficit at around 5 per cent of GDP during 2026-30, while public debt would remain below 60 per cent of GDP and government debt below 50 per cent.

The plan calls for a stronger and more sustainable public finance system, broader revenue sources and tighter management of public debt.

The revised scheme also targets stronger resilience of the banking sector. Minimum capital adequacy ratios at commercial banks are expected to move towards Basel III standards and reach 8.625 per cent by 2030 at the latest.

Credit policy will be aligned with macro-economic and monetary-market developments, with lending directed towards production, priority sectors and key growth drivers while risks in potentially vulnerable areas are closely controlled.

The plan also places greater emphasis on improving the financial structure and quality of State-owned enterprises (SOEs) to reduce potential fiscal risks.

SOEs will be encouraged to invest in science and technology, innovation, digital and green transformation, while reforms will focus on corporate governance, restructuring and the management of State capital.

Việt Nam will also develop a system to compile, monitor and analyse its international investment position (IIP), with the data to be made available to sovereign credit-rating agencies when requested.

The revised plan also covers measures to respond proactively to climate change and natural disasters, strengthen resource and environmental management, improve resilience to external risks through market diversification and energy security, and gradually integrate environmental, social and governance (ESG) factors into national governance in line with evolving sovereign credit-rating criteria.

Moody’s in May affirmed Việt Nam’s Ba2 rating but raised its outlook to positive from stable, still below investment-grade status. — VNS

Source: VNS