Fitch cuts Vietnam to BB-

Fitch Ratings said it downgraded Vietnam's long-term local-currency issuer default rating to BB- from BB and affirmed the long-term foreign-currency issuer default rating at BB-, short-term foreign-currency issuer default rating at B and country ceiling at BB-.

The outlook has been revised to stable from negative.

The downgrade is based on a steady deterioration in the country's fiscal position, which is undermined by structural weaknesses, including a low revenue base and reliance on volatile oil-related revenue, Fitch said.

These issues have been underscored during the current global economic slowdown and by recent changes in oil prices, the agency added.

Fitch said it expects Vietnam's fiscal deficit to widen even as the economy recovers in the second half of 2009 and into 2010.

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