Vietnam has received its first investment-grade sovereign credit rating at BBB- from Japan’s Rating and Investment Information (R&I), among the largest Japan-based rating agencies.

In a statement on Thursday, Vietnam’s Ministry of Finance said R&I’s rating raises Vietnam’s foreign-currency issuer rating to BBB- from BB+. It also features a stable outlook, the finance ministry said.

The finance ministry, after working with R&I during a review in April and May, called the rating an important step in its reform drive and said it would keep engaging rating agencies.

It is the first time an international agency placed Vietnam in the investment-grade category. This threshold can lower borrowing costs and widen the pool of investors able to buy a country’s debt.

R&I cited Vietnam’s strong growth, prospects for structural reform, low public debt and resilience to external shocks, the ministry said. It expected high growth to continue as the economy shifts toward productivity and innovation, public investment expands and foreign direct investment holds up, and noted Vietnam was growing faster than other Southeast Asian economies.

The agency said Vietnam’s public debt remains relatively low as a share of GDP, leaving room for development spending. A current-account surplus, steady foreign investment, and a light external-debt burden also support the economy. It stressed areas to watch, including rapid credit growth, bank liquidity, property lending, and foreign-exchange reserves.

Other notable rating agencies, such as Moody’s, S&P Global, Fitch have yet to rate Vietnam at investment grade, with Moody’s at Ba2 and both S&P and Fitch at BB+. Vietnam has set a goal of reaching investment grade from those agencies by 2030.

Vietnam should fast-track fintech sandbox as financial centers take shape, say experts