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Trade deficit predicted to plummet
September’s expected trade deficit of $500m shows that Gov’t fiscal policies are working
September’s trade deficit is expected to be half a billion dollars (US$500 million), about one quarter of the monthly figures earlier this year.
The news means a further slashing of Viet Nam’s trade deficit predictions and confirming that the Government is, as it says, in control.
Viet Nam’s trade deficit widened to $15.8 billion in the first nine months of this year, an 86 per cent year-on-year increase, according to the General Statistics Office (GSO).
The Government now expects it will reach between $18.5 billion to $19.5 billion this year.
Le Thi Minh Thuy, deputy head of GSO’s Trade Statistics’ Department, said the Government’s measures to curb imports helped reduce the monthly trade deficit from $2.85 billion to $2 billion a month from February to May.
September’s figures are expected to be the icing on the cake. The value of the nation’s exports reached $48.6 billion, an increase of 39 per cent against the same period last year.
The foreign-invested sector yielded an export turnover of $26.6 billion, or an increase of 35.1 per cent, and the domestic economic sector earned export turnover of $21.9 billion, or an increase of 44.1 per cent.
The high rise in domestic exports was due to the shipping of basic goods, such as minerals and farm produce.
Crude oil continued in top place, earning $8.8 billion, an increase of 52 per cent. It was followed by pit-coal worth a total of $1.14 billion, or an increase of 55.5 per cent, while rice brought $2.43 billion – and coffee $1.62 billion.
Other industrial products also enjoyed high export growth. Garments and textiles hit $6.8 billion, an increase of 20.2 per cent, and footwear posted $3.4 billion, an increase of 18.2 per cent.
The value of imports in the first nine months reached $64.4 billion, or a year-on-year increase of 48.3 per cent. The value is close to the $69 billion set by the National Assembly.
The foreign-invested sector imported more than $21.5 billion worth of goods, a rise of 39.7 per cent. The domestic sector hit $42.9 billion, an increase of 56.7 per cent.
Experts attribute the rise in imports to a rise in costs caused by rising world prices of oil, gold and other items.
Imports of machinery, and equipment cost a high $10.5 billion. Petrol and steel followed at more than $9.75 billion and $5.7 billion respectively.
Imports of cars posted more than $1.9 billion, or an increase of 120.4 per cent. Complete-built units totalled 45,900 worth $881 million.
Thuy said imports had decreased rapidly from $6.27 billion in August to $5.8 billion in September, a reduction of 17 per cent against the same period last year.
The decrease in imports was attributed to the Government tightening up by raising import tariffs on consumer goods and tightly controlling other imports through special import licences.
Large volumes of machinery, equipment and raw materials stockpiled around Viet Nam are the signals of sluggish production.
Exports to slow
The Ministry of Industry and Trade (MoIT) predicts that export turnover in the remaining four months of the year will be $21.75 billion, averaging $5.4 billion per month.
Viet Nam’s export performance will be hurt by decreasing demand from large economies, especially the US, according to Supachai Panitchpakdi, general secretary of the United Nations Conference on Trade and Development and former director general of the World Trade Organisation.
Although the exchange rate between the dong and US dollar remains stable, fluctuations in exchange rates have benefited exporters, according to a State Bank of Viet Nam official.
On the other hand, most fishery enterprises, which are also exporters, are facing difficulties finding capital and paying high interest rates.
The earnings from export of natural resources, including crude oil and coal, are expected to fall. The price of crude oil – and rice – fell 30 per cent from July to September.
The leather-shoe and garment sectors also ran into difficulties in delivering goods.
Meanwhile, the export prices of coffee and rubber continued to fall.
According to Le Dang Doanh, former director of the Central Institute of Economic Management, exports to the US from Viet Nam have been greatly affected so far this year – and he predicts things will only get worse in 2009.
He said that lowering exports in turn would impact domestic production, and could slow down the nation’s exports-dependent economy.
"In that context, I think that the growth rate will be 5 per cent in 2009," Doanh said.
VNN
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