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Tackling the trade deficit
The Ministry of Industry and Trade (MoIT) will take bolder measures to keep the country's trade deficit in the second quarter equivalent to roughly 20 per cent of export earnings in the period, down roughly 3.1 per cent over the rate in the first quarter, according to the MoIT's Planning Department.
MoIT Deputy Minister Nguyen Thanh Bien said the ministry would scrutinise ineffective projects to reduce imports. Close supervision on the imports of raw materials and equipment of projects that use capital from the State's budget would be among the ministry's measures to control the trade deficit, Bien said.
The ministry will also carefully review import tax incentive policies, especially in the construction industry, to further cut imports.
According to the General Statistics Office (GSO), controls over the trade deficit have proved ineffective as products subject to import controls including seafood, fruit and vegetables, steel, gems and precious metal increased by 59 per cent in the past four months.
Goods subject to import limitations, such as consumer goods, motorbikes and fully assembled under-nine seat cars also rose 41 per cent in the period.
Meanwhile, the trade deficit control has been efficient only in reducing the import of luxury consumer goods and machinery and equipment that the country can manufacture, said Bien.
Besides joining hands with other relevant bodies to encourage domestic industries to use Viet Nam-made materials and equipment, the ministry said it could impose more tariff and non-tariff measures to control imports if necessary.
Bien said the ministry would also speed up the signing of multilateral and bilateral agreements and the establishment of free trade areas to boost exports.
According to the GSO, the January-April trade deficit reached US$4.65 billion, or more than 23 per cent of the export earnings in the period due to an increase in both import volume and price.
Although the trade deficit remained high and exceeded the 20 per cent rate of export earnings targeted by the National Assembly, there are still optimistic signs as imports have fallen, especially in the second half of April.
April's trade deficit fell to $1.16 billion against the GSO's initial prediction of $1.25 billion because both export and import decreased in turnover. April's deficit was equal to March's figure and lower than $1.33 billion in February.
In the second half of April, export turnover reached more than $2.7 billion while imports tended to fall slightly at nearly $3.01 billion, or 46 per cent of the month's import spending.
In April, export turnover reached over $5.33 billion, down 4.6 per cent from the previous month and import spending was nearly $6.5 billion, falling 3.7 per cent month-on-month.
The GSO estimated that the gap between export and import growth in April was shortened to five times from 25 times of the first quarter.
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