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S&P Global Ratings affirms Vietnam's ratings

S&P Global Ratings affirmed Vietnam's sovereign credit ratingswith a stable outlook.

The rating agency affirmed the country's BB- long-term and Bshort-term sovereign ratings, as well as its "axBB+/axB" ASEAN regional-scalerating.

S&P Global Ratings said the ratings take into account Vietnam'slower-middle income, growing debt burden, weakness of the banking sector and thecountry's emerging institutional settings that hamper policy responsiveness. Itnoted that the weaknesses offset the country's adequate foreign exchange reservesand modest external debt burden.

The rating agency said it could downgrade the ratings if Vietnam'sbanks weaken further or if government debt rises significantly.

The rating agency could upgrade the ratings if the government'sreform program results in better-than-expected growth, fiscal outturns and bankingsystem resolution. While S&P Global Ratings does not expect the second scenarioto materialize in the next year, it expects Vietnam's growth prospects to improvein the next few years.

S&P Global Ratingsand S&P Global Market Intelligence are owned by S&P Global Inc.