FiinRatings successfully hosted a webinar on August 4th, 2023, titled "Vietnam Credit Market Review and Outlook: Navigating the Uncertainties" with the participation of representatives from corporates, financial institutions, and investment funds both nationally and internationally.

During the event, representatives from FiinRatings' analytical team, including Mr. Khang Le, Mr. Quan Nguyen, Mr. Hoang Nguyen, and Ms. Linh Tran, provided valuable insights into Vietnam's current macroeconomic situation, the current situation in the credit market and updated policy development. Moreover, they highlighted credit outlook of different sectors and also company-specific factors under CRA’s perspective. Below are the key takeaways from the Webinar:

1. Vietnam is facing daunting task in achieving 2023 growth target

• Vietnam’s economic growth is estimated to slow down in 2023, after a robust post-Covid economic recovery in 2022. Softer global demand weight on Vietnam’s exports and manufacturing sector. Investment disbursement by FDI and local corporates might also be slower mainly due to the weak global and local economic outlook.
• Domestic consumption and the Government’s infrastructure spending are expected to be key factors to support economic growth in 2023.

2. Significant slowdown in credit growth in 1H2023

• Credit growth in 1H2023 is the lowest since 2010, indicating challenges in the overall economic landscape.
• The real estate sector, which constitutes a majority of C-bond issuers, is facing a downturn due to the tightening credit environment, a sharp increase in interest rates, and challenges in accessing financing sources.

3. Sector Credit Outlook: Different industries in Vietnam have distinct characteristics and growth potential, but they also come with their own set of risks that need to be carefully considered. Overall, it is expected that the economy is bottoming out, but the recovery is relatively at a modest pace.

4. Company-specific factors.

• The scale does matter, but efficiency is more important for sustainable growth.
• Companies must also manage their asset-liabilities duration mismatch to avoid severe liquidity challenges.
• Maintaining a buffer is essential, especially during uncertain times, as the key lies not in predicting the future but in preparing for it.

Kindly refer to the detailed presentation handout HERE.

Revisit our webinar HERE