Việt Nam forecast to achieve investment-grade credit rating sooner than planned

Việt Nam forecast to achieve investment-grade credit rating sooner than planned

While the Government aims for an investment-grade rating by 2030, we believe it can be achieved sooner since Việt Nam already meets most quantitative criteria and only needs to address a limited set of qualitative issues.

Việt Nam's GDP is expected to gain very strong growth this year, driven by a soaring infrastructure spending, resilient exports and a modest consumption recovery. — Photo vneconomy.vn

Việt Nam’s goal of securing an investment-grade credit rating by 2030 could be achieved earlier than planned as the country already meets most key benchmarks, according to market analysts.

In a 2026 outlook report released this week, experts from investment management firm VinaCapital said the Government has ample financial resources in its own currency to cover costs such as land compensation and locally produced construction materials. However, projects involving imported technologies, including high-speed rail and power generation, will require foreign currency, making an investment-grade credit rating an increasingly pressing issue this year.

“While the Government aims for an investment-grade rating by 2030, we believe it can be achieved sooner since Việt Nam already meets most quantitative criteria and only needs to address a limited set of qualitative issues,” said Michael Kokalary, chief economist of VinaCapital.

The assessment follows a recent move by Fitch Ratings, which last month upgraded Việt Nam’s long-term senior secured debt ratings to BBB- from BB+. Fitch cited expectations of average recovery prospects for senior unsecured debt and additional recovery benefits from the secured portion of the debt instruments.

According to VinaCapital’s report, Việt Nam’s GDP expanded by 8 per cent in 2025 while the VN-Index surged 37 per cent. The Government expects growth to accelerate to 10 per cent in 2026 and VinaCapital also anticipates very strong performance this year, driven by a surge in infrastructure spending, resilient exports and a modest recovery in consumption.

“Việt Nam’s 2025 GDP growth was significantly boosted by an 80 per cent jump in exports of laptops and other high-tech items to the US and by a 42 per cent increase in both Chinese and Indian tourist arrivals, which masked mediocre domestic consumer spending growth. This year, we expect a normalisation of both consumption and export growth. These two dynamics will largely offset each other, while the lagged impact of an infrastructure spending surge in 2025 will support Việt Nam’s GDP growth in 2026," the report states.

“We also acknowledge that 10 per cent GDP growth represents an upside scenario, with the Government having a range of tools at its disposal that could support this outcome, particularly if additional stimulus measures are implemented.”

Domestic consumption has remained weak over the past two years as households depleted savings during COVID and have since maintained an unusually high savings rate. While estimates vary, most analysts agree that elevated savings help explain the subdued pace of retail sales growth.

“We expect consumption to return to more normal levels of growth, although not to boom, by mid-2026, at which point the savings rate will have been elevated for nearly three years, giving households ample time to rebuild a considerable portion of their pre-COVID savings. Furthermore, household incomes in Việt Nam have been growing at a circa 6–7 per cent pace over the last two years and the stock market and real estate prices were both up more than 30 per cent in 2025, all of which supports spending," the report added.

“The caveat to this forecast is that unlike our expectation for resilient exports for 2026, which is built on solid leading indicators, our consumption recovery forecast is built on more subjective econometric analysis. That said, the Government has a very ambitious GDP growth target for 2026 that can only be met with higher consumption growth. To date, the Government has taken some modest steps to support consumption, but it could easily do much more if needed.”

VinaCapital noted that while the Government’s reform agenda is designed to lift long-term growth, it is also under pressure to deliver strong short-term results. Balancing both is challenging given the dynamic of short-term pain for long-term gain. As a result, the firm expects policymakers to rely heavily on three key levers it can realistically pull to boost GDP growth in 2026: consumption, infrastructure development and real estate development. 

Bizhub