Trade Deficit Surges 50 per cent to US$3.56Bln in First Half

Trade Deficit Surges 50 per cent to US$3.56Bln in First Half

Vietnam’s trade deficit will widen to around US$3.56 billion at the end of this month, a rise of 50 per cent against the first half of 2004, due to substantial rises in imports and a slowing export market, official figures show.

The government’s General Statistics Office estimated that the total import bill jumped 22 per cent on-year to reach US$18 billion between January and June this year, while export turnover was up by only 17.4 per cent on-year to nearly US$14.44 billion in the same period.

The six-month deficit already accounted for more than 24 per cent of the total export revenues achieved in the same period, compared to the safe level of 20 per cent set by the Trade Ministry.

In June alone, Vietnam spent US$3.3 billion on imports but fetched only US$2.55 billion from exports, the office also reported.

Statistics show the soaring import spending in the first half of the year was fueled by high increases in the import of daily essential goods and materials for local production.

Spending on wheat nearly doubled compared to the level for the corresponding period last year, at 682,000 tons worth US$117 million, while the milk import value also soared 67.9 per cent to US$171 million. Foreign paper also cost the country 60.6 per cent more than the first half of 2004, at US$166 million.

The import of materials and products that serve local production such as steel and iron, plastics, chemicals, pesticides, animal feed, and wood and wood materials, also increased sharply, by over 30 per cent on-year.

The import bills of motorbikes and automobiles also leaped high, mainly due to increasing local demand, at 35.2 per cent and 45.8 per cent on-year to US$274 million and US$513 million, respectively. Some 18,700 finished motorbikes and 10,000 finished automobiles were shipped into Vietnam since the beginning of the year.

Meanwhile, the export of key industrial staples such as garments and textiles, footwear and seafood increased slightly due to fiercer competition and more barriers in foreign markets. Earnings by these products were up by only 0.1 per cent, 2.8 per cent and 9.3 per cent on-year, to US$2.05 billion, US$1.37 billion and US$1.07 billion in the period.

The export of bicycles even fell 18.7 per cent on-year to only US$101 million, due to the products facing anti-dumping taxes in the EU market.

Export earnings from major farm produce such as coffee, pepper and tea also slumped by 7.8 per cent, 14.2 per cent and 19.6 per cent on-year, due to declining export volumes.

The falls were partly compensated by surges in outbound sales of coal, household appliances and electronics, computers, woodwork and crude oil, the statistics show. Crude rose by 34.1 per cent to reach US$3.37 billion, while woodwork was up by 44.6 per cent, earning US$712 million.

Experts, however, have warned that local production and exports will encounter more challenges in the second half of the year, as prices of crude oil and many important materials will likely keep soaring.

Vnexpress.net