Moody's: Vietnam sees progress

In its annual report on Vietnam, Moody's Investors Service said the government's Ba3 foreign- and local-currency bond ratings with positive outlook are supported by the progress made in externally oriented policies and state enterprise restructuring.

The bond ratings, along with Moody's assessment of a high risk of a payments moratorium in the event of a government bond default, form the basis for Vietnam's foreign-currency country ceiling for bonds of Ba2.

Vietnam's public finances are manageable even as the government runs moderately large deficits to support investment and boost income growth, Moody's said. The overall policy stance supports rapid economic growth, although this has, at times, contributed to inflationary pressures, the agency said.

The credit challenges facing Vietnam include maintaining monetary stability, containing government debt and advancing further reform of the country's state-owned banks and industrial enterprises, Moody's said.

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