Trade Deficit Tends to Balloon

All macroeconomic indicators in the first six months of 2010 were positive and the Vietnam’s economy continued to revive quickly in the first half. The statement was made at the press conference on six-month socioeconomic development review by Deputy Minister of Planning and Investment Nguyen Van Trung.

 

The country was expected to obtain nearly VND366.8 trillion in industrial production value in the first half of the year, a 13.8 % year on year increase. The non-State-owned sector, which accounted for 35.5 % of the value, expanded by 12.6 % and the foreign-invested sector, which made up 42 %, rose 17.5 %. Vietnam’s export prices of have also improved.

 

By the end of June, the nation saw nine commodities with export revenues exceeding US$1 billion including seafood, rice, crude oil, wooden furniture, apparel, footwear, machine tools, electronics and gemstone.

 

Foreign direct investment (FDI) disbursements in Vietnam were forecast to amount to US$900 million in June, raising the total in the first half of the year to US$5.4 billion, up about 6 % year on year. In June, the country licensed 78 fresh FDI projects worth more than US$800 million, bringing the total number of projects to 438 and the total value to US$7.9 billion in the six months, down 20 % in project but up 43 % in value year on year. The aggregate FDI amount in the first half therefore contracted 19 % to US$8.43 billion only.

 

However, economic experts expressed their deep concerns over rebounding trade deficit. Export revenues exceeded US$6 billion in May and June. In the first six months of 2010, the country raked in US$32.13 billion, or 52.7 % of the full-year plan, while it spent US$38.9 billion on imports, 29 % over the same period of last year. Trade gap in June was estimated at US$1.2 billion, or 20 % of the monthly export turnover.

 

The consumer price index (CPI) added only 0.22 % in June, totalling 4.78 % in the first six months of 2010. In the second quarter, CPI growth was 0.63 %, much lower than 4.12 % in the first quarter.

 

Deputy Minister Trung said Vietnam will face challenges in the last six months of the year because it has to harmonise economic growth and inflation control. “Both targets need proper care to ensure macroeconomic stability,” said Mr Trung.