Vietnam Should Export Gold to Reduce Trade Deficit

Vietnam should promote gold exports in order to reduce trade deficit as it will help turn gold into capital for the local economy, the state-run Thanh Nien (Young People) newspaper said June 12.

 

Importing gold has partially pushed trade deficit because up to 95 per cent of gold amount consumed in Vietnam is imported, the paper said, estimating that the country imports around 60 tons of gold a year.

 

In the first five months of this year, Vietnam reportedly imported as much as 40 tons of gold.

 

With the world's current gold price of some US$900 an ounce or some US$1,084 per tael [duty, interest, charges are excluded], Vietnam has to spend nearly US$1.8 billion a year importing 60 tons of gold. Based on the current price, total value of gold imported over the last six-years amounted up to over US$10 billion.

 

Importing a huge amount of gold naturally requires large sum of foreign currency. Additionally, a significant amount of capital of the society lies in gold, impacting on bringing capital into direct production.

 

The Vietnamese government has not allowed gold exports over the last years. The imported gold, thus, is still staying inside the country, particularly in residents, banks, gold traders and industrial production businesses.

Gold prices in May were up nearly 3.4 times compared to those in December 2001, far higher than the consumer price index (CPI) growth of 77 per cent and the U.S. dollar price growth of 7.1 per cent in the same period.

 

Domestic gold prices have not only depended on the world's gold price but also the VND/USD exchange rate over the recent months. (Young People)