Bangkok--3 Mar--Standard & Poor's The heat generated by Vietnam's blistering economic growth may soon become too uncomfortable, said Standard & Poor's Ratings Services today. With consumer prices rising at a high of 15.7% in February 2008, Vietnam's policymakers are in a tight spot. Macroeconomic risks will escalate if high inflation is allowed to become entrenched. On the other hand, investments needed to boost long-term economic potential will be held up if the authorities come down heavily on inflation. Recent announcements by the government suggest that it remains undecided. However, for the credit ratings on the government, (foreign currency BB/Stable/B; local currency BB+/Stable/B) macroeconomic stability is more important than maintaining current high levels of economic growth. High inflation discourages private sector investment, constrains financial sector development, and weakens popular support for the government (see commentary titled "Inflation Poses Challenges And Opportunities For Central Banks In Developing Asia," published on RatingsDirect on Feb. 14, 2008). We do not expect high inflation to result in a sovereign credit rating downgrade in the next one to two years unless it accelerates much further. However, support for the government's creditworthiness could be eroded if the inflation rate does not retreat from the current level in this period. Media Contact: David Wargin, New York (212) 438-1579 [email protected] Analyst Contacts: KimEng Tan, Singapore (65) 6239-6350 Elena Okorotchenko, Singapore (65) 6239-6375 Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 23 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com. Key Contacts: Americas Media Relations: (1) 212-438-6667 media_ [email protected] Americas Customer Service: (1) 212-438-7280 [email protected]