Vietnam’s trade deficit is estimated to increase to US$15.01 billion in the first seven months of this year, due to higher import revenues caused by global fuel price increases.
Up to July, the country is set to spend US$51.89 billion importing goods, a hike of 56.8% over the same period last year, while it is estimated to earn nearly US$36.88 billion from exports, surging 37.7% year-on-year, according to the country’s General Statistical Office.
In July alone, the country’s import turnover is estimated at US$7.05 billion, while export revenues stand at US$6.25 billion.
For the seven-month period, expensive import items increased, including automobiles and their spare parts, up 199.4% to over US$1.83 billion, fertilisers, up 118.9% to US$1.11 billion, steel, up 93.6% to US$5.01 billion, and petroleum products, up 90.7% to over US$7.75 billion.
Meanwhile, high earning export commodities include crude oil generating revenues of US$6.8 billion, up 52.2%, textiles and garments at US$5.09 billion, up 20.5%, footwear at US$2.76 billion, up 18.4%, seafood at US$2.34 billion, up 17.7%, rice at US$1.81 billion, up 87.6%, and woodwork at US$1.59 billion, up 21.3%.
Vietnam is aiming to boost exports and local production to try to reduce the trade deficit in 2008.
According to a proposal by the Ministry of Industry and Trade to the government, local businesses should take measures to improve exports’ quality, especially agricultural, forestry and fishery products.
Relevant agencies should strengthen the production and export of locally-made items and those with high export value.
These include handicrafts, processed foodstuff, rubber-based and mechanical products, textiles, garments, footwear, woodwork, electronic components, plastic ware, electric cables, and mechanical items.
The country should also strengthen service exports to contribute to lowering the trade deficit, according to the ministry.
Local businesses should intensify trade promotion, broaden traditional and major export markets, and reach more into neighbouring markets.
Along with the proposed measures, the government has applied financial and monetary policies to stabilise the macro-economy by keeping a rein on input material prices for producers and requesting commercial banks to maintain loan interest rates for suppliers and exporters below 150% of the prime rate.
Additionally, the country has upped capital for the National Trade Promotion Programme to lure additional foreign investment and accelerated administrative reform, especially in the fields of tax and customs.
Last year, the country’s trade deficit stood at US$14.12 billion, accounting for 29.1% of its export revenues and 19.8% of its gross domestic product (GDP), said the ministry.