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July trade deficit slows down to six-month low
The country's growing trade deficit slowed down this month and is now, estimated at US$800 million.
This is much lower than the average monthly deficit in the first six months of the year at $2.46 billion, according to the General Statistics Office (GSO).
Total trade deficit in the first seven months hit $15 billion, up 37 per cent from last year.
The slowed growth of the trade deficit over the past month was attributed by the GSO to Government efforts to curb inflation, its lowered 2008 economic growth target of 7 percent and Government supports in the export sector.
Imports in the first seven months totalled $51.9 billion, up 56.8 per cent year-on-year, while exports rose 37.7 per cent to $36.9 billion.
Le Minh Thuy, an official of the GSO, said that many major exports brought in more money thanks to soaring prices in the global market, and not because of an increase in quantity.
Rice exports reached 2.79 million tonnes, a decrease of 6.8 per cent, even though export turnover reached $1.81 billion, an increase of 87.6 per cent. Coffer exports climbed to 662,000 tonnes and brought in $1.38 billion, an increase of 3.8 per cent.
Crude oil - which brings in the largest export revenue - earned $6.8 billion, a rise of 52.2 per cent over the same period last year. Coal exports rose by 38.4 per cent to $811 million with a volume of 14.47 million tonnes.
Exports in the first seven months saw an upward trend in the domestic economic sector, bringing in $16.47 billion, up 40.1 per cent, while the foreign-invested economic sector earned $20.40 billion, up 35.8 per cent.
Thuy said the country's exports were partially hurt by changes in conditions with its largest importers like the US and the European Union.
The US was facing an economic decline and the General System of Preferences (GSP) will no longer be applicable to Vietnamese footwear imported into the EU starting January 1, 2009.
Despite these changes, Thuy said the country has not been trying to limit imports in the last seven months. Vietnam has spent $8.1 billion on importing equipment and machinery, a rise of 40.3 per cent.
Imported equipment and machinery was needed for the domestic production industry.
Steel imports rose 96.6 per cent to $5.14 billion and auto imports reached 43,500 units at $812 million, a 3.7 fold increase over last year.
The office predicts that this year's trade deficit will total nearly $20 billion due to rising demand of imports in the remaining months of the year.
It said the 2008 trade deficit would reach about $87 billion and exports will stay at around $66.5 billion.
VNS
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