Moody's upgrades Vietnam

Moody's Investors Service said it upgraded the government of Vietnam's long-term issuer and senior unsecured ratings to Ba3 from B1 and changed the outlook to stable from positive.

The upgrades are underpinned by strong growth potential, supported by increasingly efficient use of labor and capital in the economy, Moody's said.

A long average maturity of government debt and a diminishing reliance on foreign-currency debt point to a stable and gradually moderating government debt burden, particularly if strong growth is sustained over time, the agency said.

The structure of Vietnam's government debt also limits susceptibility to financial shocks, Moody's added.

The upgrade also considers improvements in the health of the banking sector that Moody's expects to be maintained, albeit from relatively weak levels, the agency said.

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