Vietnam Trade Deficit Forecast to Rise 67 per cent to US$7.5 Bln in First Quarter

Vietnam’s trade deficit is forecast to widen to US$7.5 billion in the first quarter of this year, up 67 per cent on year and its exports are slowing due to U.S. dollar devaluation and rising costs, according to a trade meeting held by the Ministry of Industry and Trade at weekend.

 

Exports would grow 23.3 per cent to US$13.2 billion in the first quarter, slowing from a 29.2 per cent rise in the first two months, Pham The Dung, head of the Import Export Department under the Ministry of Industry and Trade told the meeting.

 

The ministry also raised its forecast for Vietnam’s annual trade deficit to US$20 billion from US$16.97 billion this year, the local Thanh Nien newspaper said.

 

Last year, the deficit doubled to US$12.4 billion as the country’s imports jumped 35.5 per cent to a record US$60.8 billion.

 

Vietnamese exporters are seeking government support to overcome a series of difficulties such as U.S. dollar devaluation and high lending interest rates, Vietnamese state media said.

 

Bui Xuan Khu, Vice Deputy Minister of the Ministry of Industry and Trade said fuel and minerals, which account for 50 per cent of Vietnam's total export value, have attained high value due to increasing prices, but the rest of Vietnam's exports are at risk of losses because of US dollar devaluation.

 

S&P Ratings Services and other financial analysts said that the State Bank of Vietnam’s tightening the monetary policy to rein in inflation running to close to 16 per cent has put interest margins under pressure at small banks.

 

Local banks are facing difficulties because only 10 per cent of the 85-million population have their bank accounts. The central bank has recently called on the local banks not to raise their dong deposit to over 12 per cent as overnight rates soared 20 per cent-30 per cent at times. (Young People Mar 16, VietnamNet)