Vietnam is expected to preserve its position as one of Asia’s most rapidly expanding economies after India through 2028, buoyed by export momentum and a wave of infrastructure investment, a senior S&P Global Ratings official said on Thursday in Hanoi.
The government has made an explicit push to secure at least one investment grade sovereign rating by the end of the decade and is targeting annual gross domestic product growth of at least 10% through 2030. Those ambitions are supported by a slate of large-scale projects announced last year, collectively valued at an estimated $200 billion.
S&P perspective and projections
Kim Eng Tan, managing director for Asia sovereign ratings at S&P Global Ratings, told attendees that the state’s expansion of infrastructure expenditure is likely to extend the period of strong economic growth. "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," she said.
S&P’s projections released last week forecast Vietnam to be the fastest-growing economy in Asia, excluding India, over the coming three years with annual growth of 6.7%. Under those same estimates, the country would be the regional growth leader in 2029 as well, excluding India.
Vietnam recorded 8% growth last year, placing it second in Asia after Taiwan in S&P’s ranking, and the ratings firm said rising global demand for electronic goods will continue to underpin the nation’s expansion. Vietnam remains a major exporter of technology products, with assembly operations run by multinational firms across the country.
Sovereign rating status and potential pressure points
In its most recent assessment published in August, S&P affirmed Vietnam’s long-term sovereign rating at BB+ and its short-term rating at B, keeping the nation below investment grade. The agency flagged several downside risks that could hurt the rating if they materialize.
Among the concerns, S&P identified stress within the banking sector as a material risk because of regulatory shortcomings and weak standards for transparency and disclosure. The ratings firm noted that a sustained rise in the government’s net debt above 30% of GDP would also be a trigger for potential downgrades.
Vietnam’s finance ministry estimated that government debt stood at around 33% to 34% of GDP at the end of 2025.
Separately, in February, Moody’s commented that the country’s infrastructure expansion could result in higher fiscal deficits and an increase in public debt, mirroring concerns highlighted by S&P.
Implications
While the infrastructure push and export strength support robust growth, elevated public spending and debt levels present clear tradeoffs that market participants and policymakers will need to monitor closely.