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Vietnam trade deficit through August falls 67 pct to $5.1 bln
Vietnam’s trade deficit narrowed through August, the government estimated, as the country’s export performance outpaced that of regional competitors.
The gap in the first eight months totaled US$5.1 billion, down 67 percent from $15.6 billion during the same period last year, according to preliminary estimates from the General Statistics Office in Hanoi. Exports fell 14 percent to $37.26 billion, while imports dropped 28 percent to $42.38 billion.
Vietnam posted a record trade deficit of about $17.5 billion last year, driven largely by imports for construction projects and by foreign investors. The gap is likely to be about $7 billion in 2009, according to Standard Chartered Plc.
“The trade deficit is a lot more manageable now than last year, when it was starting to get out of hand,” Beat Schuerch, the Ho Chi Minh City-based chief representative of Indochina Capital Advisors Ltd., said in a phone interview. The gap “is not large enough to warrant concerns at this point.”
The narrowing of the shortfall may ease concerns about Vietnam’s currency. Morgan Stanley said last week that the trade deficit is a “source of pressure” on the Vietnamese dong. The currency traded recently at about 17,816 per dollar, compared with 17,483 at the end of 2008.
“Risks of further sharp one-off devaluations have moderated, as the trade deficit has narrowed and the economy is picking up,” Tai Hui and Thomas Harr of Standard Chartered in Singapore wrote in a note dated Monday.
Exports were led by garments, shipments of which fell 1 percent to $5.9 billion.
Apparel exports
Vietnamese apparel exporters are faring better than their Indian and Indonesian rivals in shipping products to the US Apparel exports to the US, Vietnam’s biggest market, were little changed in the first half of the year. Indian garment shipments to the American market slumped 9 percent and Indonesian apparel exports to the US slipped 3 percent, according to the US International Trade Commission.
Crude oil exports fell 48 percent by value to $4.1 billion even while rising 8 percent by volume. Oil has traded 52 percent lower this year than during the same period in 2008.
Vietnamese exports are poised to recover as commodity prices and production increases, Ho Chi Minh City-based fund managers Dragon Capital told investors this month. “Exports have begun to rebound,” wrote Hui and Harr of Standard Chartered in Monday’s note.
Recent export figures demonstrate “the strength and market access of Vietnamese goods,” Indochina Capital Vietnam Holdings Ltd. said, in a monthly note that called the overall 13 percent drop in exports initially reported through July “an encouraging number” given the declines in the prices of coffee, oil, rice and rubber since 2008.
Imports were led by purchases of foreign machinery and mechanical goods, which fell 17 percent to $7.4 billion. Steel imports declined 42 percent to $3.2 billion.
The pace of decline in imports has been narrowing in recent months, Morgan Stanley said in its report last week, citing steel as an example.
thanhnien, bloomberg
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