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Trade deficit gradually narrows
The trade gap has gradually narrowed in recent months, particularly in June thanks to a reduction in imports and a rise in the exchange rate between VND and USD, which helped promote exports and curtailed imports.
According to relevant agencies, the import surplus was estimated to reach US$14.755 billion in June, equivalent to 49.8 percent of export turnover. This figure was even higher than last year’s total trade deficit, and constitutes an all-time high. However, the trade deficit saw a decline in the second quarter of this year after a surge in the first three months. The trend continued in June when the figure dropped to a lowest level this year.
Economists have attributed the reduction in the trade deficit in the first half of this year to several causes. Many key domestic products, such as crude oil, rice, coffee, coal, rubber, cashew nuts, pepper and tea, contributed remarkably to the country’s export turnover. In the reviewed period, there were six items achieving an export turnover of more than US$1 million, including garments and textiles (US$4.007 billion), footwear (US$2.274 billion), seafood (US$1.890 billion), rice (US$1.484 billion), wood products (US$1.365 billion), electronics and spare parts (US$1.237 billion) and coffee (US$1.181 billion).
They said both the rate and scale of imports have decreased in recent months, over US$8 billion in March, April and May, and then to approximately US$6.8 billion in June. Moreover, the price of goods continued to rise rapidly on the global market, while the domestic prices remained low.
The economists then quoted initial figures showing a sharp increase in the re-export of steel, fertilizer and oil since early May: 660,000 tonnes of steel, 110,000 tonnes of fertilizer and 550,000 tonnes of oil.
The rising exchange rate between VND and USD also helped promote exports and curtailed imports. Nevertheless, the trade deficit remained high in the first six months and the total figure for 2008 is likely to be 1.5 times higher than last year. The main reason is that the competitiveness of goods in the domestic market is weak, and the import-export infrastructure is improving slowly. Finally, soaring prices of goods, such as oil, ingot steel, fertilizer and plastics coupled with the high exchange rate between VND and USD have driven up the import value.
VOV
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