Vietnam's Ratings: Moody's, Standard & Poor's, WB Ease of Business, Transparency International

Moody’s and Standard & Poor’s provide credit ratings. The World Bank has developed an “Ease of Doing Business” index that measures time and costs of interacting with goverment regulators. Transparency International’s Corruption Perception Index Score relates to perceptions of the degree of corruption as seen by business people and country analysts.

Moody’s Investors Services

Moody’s ratings are shown below, from least credit risk, Aaa, to greatest credit risk, *C*. There are also numerical modifers 1,2, and 3.

Aaa Aa A Baa Ba B Caa Ca C

050706 Moody’s upgrades Vietnam’s ratings to Ba3, LT Issuer Rating
000406 Vietnam’s B1 rating remains under pressure due to lack of progress on reforms, says Moody’s in Annual report

For more information, click here: www.moodys.com/vietnam.

Standard & Poor’s Sovereign Rating

Vietnam (foreign currency BB-/Stable/B; local currency BB/Stable/B)
Last rating action: May 28, 2002; ratings assigned.

Official estimates put first-half 2005 GDP growth at 7.7% year on year. While this is better than expected given slower export growth and drought in parts of the country, it indicates that the official growth target of 8.5% for 2005 is unlikely to be met. Garment exports continued to perform poorly, with exports to the U.S. (about 50% of total) down 20% in the first half of the year. The abolishment of garment quotas among WTO member countries was expected to have some negative impact on non-member Vietnam. However, the setback to this and other exports is likely to be short-lived, once Vietnam competes on equal terms as it joins the WTO, expected in 2006. In addition, the textile sector is increasingly benefiting from demand in China. The government embarked on a nationwide clean-up of poultry farms, and is planning a poultry vaccination program in an effort to contain the spread of bird flu, which has killed 41 people since end of 2003. The fiscal cost could be large, potentially derailing the deficit target of 3.9% of GDP (including off-budget items). The effect of bird flu on prices is adding to inflation concerns. The government raised its 2005 inflation target to 6.5% from 5.0% while inflation was at 7.5% in July. Salary increases for state sector employees, drought, and higher imported input prices are factors pushing prices up. High oil prices and the cut in fuel subsidies will also feed into higher prices. Thus, in the absence of further measures by the State Bank of Vietnam (SBV) to slow credit growth, inflation targets are not likely to be met. In a recent statement, however, the SBV indicated that it does not plan to change bank interest rates, and that priority will be given to achieving the official growth target of 8.5%. Moreover, it followed up with liquidity injections after a recent drop in credit growth. Given the official policy stance, the main risks of exacerbating the inflationary impetus and of deteriorating asset quality in the banking sector remain.

For more information, click here: Asia-Pacific Sovereigns: Report Card, September 2005.

World Bank “Ease of Doing Busines” Ranking

Vietnam ranks 99 out of 155, or close to the middle of the “third quartile,” of countries in terms of “ease of doing business,” according to the World Bank.

The “ease of doing business” index ranks economies from 1 to 155. The index is calculated as the ranking on the simple average of country percentile rankings on each of the 10 topics covered in Doing Business. The ranking on each topic is the simple average of the percentile rankings on its component indicators. Download rankings in Excel spreadsheet (32KB).

Here are Vietnam’s rankings by category of “ease of doing business”:

For a full explanation of how the Ease of Doing Business Index and the sub-indices are calculated. Download explanation of the Ease of Doing Business Index (pdf, 66KB).

For more information, click here: http://www.doingbusiness.org.

Transparency International “Corruption Perception Index” Ranking

The Corruption Perception Index Score relates to perceptions of the degree of corruption as seen by business people and country analysts and ranges between 10 (highly clean) and 0 (highly corrupt).

For more information, click here: http://www.transparency.org.