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Trade deficit grows wider than forecast in first quarter
The country's trade deficit in the first quarter of the year is estimated to be higher than last month's forecast, reaching up to US$3.6 billion, according to preliminary statistics from the Ministry of Industry and Trade (MoIT).
The Ministry of Planning and Investment late last month anticipated that the trade deficit in the first quarter would be roughly $2.6 billion. It forecast that export turnover would reach $14.2 billion, while the import value was predicted to be at $16.8 billion.
At a yesterday's meeting, MoIT reported that the country's export turnover in the first three months of the year was estimated to be $14 billion, down 1.6 per cent over the same period last year, while import value was expected to reach $17.6 billion, up 38.4 per cent against the same period last year.
Deputy minister of industry and trade Nguyen Thanh Bien attributed the export decrease in this year's Q1 over last year's same period to the country's gold re-exports. The country in the first quarter last year earned more than $1 billion from re-exporting gold.
Bien said that the export decline was also due to a reduction in exports of the country's key staples, including crude oil and coal, which were down 46.8 per cent and 15.5 per cent, respectively, in terms of volume.
However, MoIT noted that the exportation of electrical cables and lines, steel, machinery and electronic products and components saw sharp surges of between 40 and 120 per cent in the first three months.
Meanwhile, it said that the increase in the import value was in the wake of a rebound of domestic production. In the first quarter of the year, the country saw a high surge in the importation of commodities, including cotton, textiles, fabrics, steel ingot and components for computers, automobiles and motorbikes, which all served domestic production.
Imports surge
In the first quarter, the import value of cotton was predicted to see the highest surge, 162.9 per cent, to reach 92,000 tonnes. Automobile and motorbike parts followed with an import rise of 119.8 and 82.7 per cent, respectively.
Imports of metals, computer components, chemicals, textiles and leather also contributed significantly to the rise in imports in the first quarter, as these goods surged between 13 and 55 per cent.
The first quarter also saw a value decrease between 14.4 and 30.5 per cent in imports of petroleum, liquefied petroleum gas and completed motorbikes.
With a Q1 export turnover of $14 billion, the country will have to fetch roughly $5.2 billion a month in the remaining months of the year to meet the annual export target of $60 billion set by the Government.
MoIT said that it would encourage the business community to keep a close eye on export market information in a move to timely remove difficulties for each and every commodity.
The ministry also asked the State Bank of Viet Nam to direct commercial banks to ease access to credit for exporters and producers.
To reduce the trade deficit, the ministry has required producers to encourage the development of supporting industries and consumer production in a move to give substitutes for imported products.
At yesterday's meeting, attendees also urged relevant ministries to quickly ratify a decree on developing supporting industries so that the country could churn out supporting products for domestic use and gradually for exports as of 2012.
Close supervision on the importation of luxury products including automobiles, motorbikes, wine and perfume should also be supervised to cut the trade deficit, attendees said.
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