HANOI, April 2 (Reuters) – Vietnam is forecast to remain Asia’s fastest-growing nation after India through 2028, supported by exports and infrastructure investments, although heavy public spending may lead to larger fiscal deficits, a senior S&P Ratings official said on Thursday.
Hanoi is seeking an upgrade of its sovereign rating to investment grade from at least one major agency by the end of the decade, while also targeting annual economic growth of at least 10% through 2030, backed by investments in hundreds of new large-scale projects launched last year worth an estimated $200 billion.
“The government’s commitment to expanding infrastructure investment will likely bring more years of strong growth. Such expenditure may lead to larger fiscal deficits and smaller current account surpluses that may offset some of its gains,” Kim Eng Tan, managing director for Asia sovereign ratings at S&P Global Ratings, said at a conference in Hanoi.
Vietnam is expected to be Asia’s fastest-growing economy, excluding India, over the next three years with annual growth forecast at 6.7%, Tan said, citing S&P projections released last week. Under those estimates, Vietnam would also lead regional growth in 2029, excluding India. Last year, the country grew 8%, second only to Taiwan in Asia, according to S&P.
He said rising demand for electronic goods would underpin Vietnam’s growth. The country is a major exporter of technology products, assembled in factories run by foreign multinationals across the country.
In its latest report on Vietnam in August, S&P affirmed its BB+ long-term and B short-term sovereign credit ratings, keeping the country below investment grade.
The agency said downside risks to the ratings included stress in the banking sector, which it considers high risk due to regulatory weaknesses, weak transparency and disclosure standards.
Ratings could also be lowered if the government’s net debt surpassed 30% of gross domestic product on a sustained basis, S&P said in August. Vietnam’s finance ministry estimated government debt was 33%-34% of GDP at the end of 2025.
In February, Moody’s said Vietnam’s infrastructure drive could lead to a higher fiscal deficit and rising public debt.
(Reporting by Francesco Guarascio; Editing by John Mair)
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