|
Measures to reduce trade deficit to below US$20 bln
Over the past few months, Vietnam has tried to control and keep its trade deficit under US$1 billion per month. However, the Ministry of Trade and Industry (MoIT) warns that the figure will rise in the remaining four months of this year if no effective measures are put in place.
According to the ministry, the trade deficit has risen slightly from US$736 million in June to US$753 million in July and US$900 million in August, bringing the total trade deficit in the past eight months to US$15.96 billion.
The Government has set a target to reduce the total trade deficit to less than US$20 billion this year. This means that the maximum monthly trade deficit in the last four months should be around US$1 billion. MoIT Deputy Minister Do Thanh Bien says this target will be achievable.
He gives three reasons to support his ministry’s forecast. First of all, the prices of Vietnam’s key imports such as crude oil, petrol, steel, steel ingots and fertilisers are going down on the global market.
Secondly, the demand for domestic production in the remaining months of this year normally relies on imports in July and August. However, imports in August exceeded the figure a year ago. In the past 8 months, the import of steel increased by 36 percent, steel ingots by 46 percent, fertiliser by 5 percent, urea by 48 percent and petrol and oil by 13 percent.
Thirdly, the Government’s recent measures to cease unnecessary projects, cut down on public spending and prevent waste have caused the demand for many products to fall significantly.
Both the Government and the MoIT have adopted measures to reduce imports. Most recently, on August 29, the Government asked the MoIT to implement tax and non-tax measures to increase exports and reduce imports. Accordingly, the MoIT raised import taxes, the special consumption tax and value added tax while requiring businesses to pay taxes at border gates.
The ministry has applied many non-tax measures, including strengthening inspections and labelling imported commodities. It has also introduced an automatic licensing mechanism for several imports which are under strict scrutiny.
In addition, the MoIT has encouraged businesses to increase exports to reduce imports. In the past eight months, Vietnam exported US$43.3 billion worth of commodities, or US$5.4 billion per month on average. If the minimum monthly import level of US$5.5 billion is maintained in the last four months of 2008, total exports for 2008 will be raised to approximately US$65 billion, a year on year increase of 22 percent.
The MoIT says it will continue to keep a close watch on import-export activities to make more accurate forecasts and put forward appropriate solutions aimed at meeting the Government’s target.
VOV
|
