In a report on the outlook for emerging markets, Fitch noted that Vietnam had low fiscal flexibility, given its high public sector liabilities, to maneuver with regard to policy, which could limit the size, speed and effectiveness of their responses.

Fitch also downgraded the growth of other emerging markets, forecasting that the pandemic would pull emerging markets’ growth down to 2009 levels.

According to Fitch, the combination of financial market stress hitting emerging markets, less policy space, weakening external demand and a rising number of localised coronavirus cases will weigh heavily on growth./.VNA