Vietnam Gains 10-Year Lowest Trade Deficit In First 7 Months
Vietnam gained a trade surplus of about $100 million in July, equivalent to 1 percent of the export value
Vietnam gained a trade surplus of about $100 million in July, equivalent to 1 percent of the export value, which helped reduce the trade deficit in the first seven months of this year at about $58 million, the lowest level over the past ten years, reported the Ministry of Planning and Investment (MPI) on Wednesday.
During the 7-month period, the country’s total export value reached $62.9 billion, an increase of 19 percent year- on-year, of which the domestic sector contributed $23.9 billion, down 1.7 percent, while the foreign direct investment ( FDI) sector made $39 billion, up 36.6 percent.
Meanwhile, the country spent $63 billion for the imports, up 7.3 percent year-on-year, of which the domestic sector accounted for $30 billion, down 7.3 percent, while the FDI sector spent nearly $33 billion, up 25.3 percent, year-on-year.
Of the country’s total import value during the 7-month period, $15.3 billion came from China, an increase of 15.6 percent year-on-year.
Insiders said that the declining trade deficit figure reflected the government’s effective measures to curb inflation and stabilise the macro economy which have been applied since the beginning of this year. However, the quick reduction of the trade deficit in recent months forecast some risks to Vietnam’s economic downturn.
The experts’ warning was attributed to the fact that most domestic industries depend on the imports of materials, equipment and machines for their operation. That’s why, decreased trade deficit gives out signs for standstill and slowdown domestic production. Fewer orders from foreign clients, plus high inventories of products, have negatively impacted many sectors’ imports of machines and equipment.
According to the latest data from the Vietnam general Statistical Office (GSO), as of July 1, 2012, the inventory ratio by the processing industry increased 21 percent year-on-year; fertiliser production with 103.3 percent; telecom making sector with 98.5 percent; cigarette manufacture with 74.4 percent; metal appliance production with 68.5 percent; and plastic production with 61.5 percent.
Vietnam has released its import and export strategy to the year 2020 and a vision to 2030, under which targets are set for an export growth of 11-12 percent a year by 2020, and for imports, 10- 11 percent.
The trade deficit would be reduced to less than 10 percent of the total export turnover by 2015; a trade balance would be reached by 2020, and a trade surplus from 2021 onwards, said the strategy.
Category: Economy
