Vietnam 7 months trade deficit 5.45 bln usd; headed for record annual deficit

Vietnam 7 months trade deficit 5.45 bln usd; headed for record annual deficit

	Published : Thu, 26 Jul 2007 09:03 By : Agencies Print this Story

HANOI (Thomson Financial) - Vietnam is headed for a record trade deficit this year after posting a deficit of 5.45 billion US dollars in the first seven months, an amount already ahead of the full year figure for 2006, the government said Thursday.

Imports have vastly outpaced exports as Vietnam is buying an increasing amount of machinery, parts, fuel and commodities including steel.

From January to July, imports grew 29.8 percent to 32.24 billion US dollars while exports rose 19.6 percent to 26.79 billion dollars, according to an early estimate by the General Statistics Office (GSO).

'It is forecast that the trade deficit figure will be quite high at the end of the year,' said a GSO official. 'Imports grew strongly as demand for input materials remained huge for the country's booming economic development.'

The trade ministry this month predicted Vietnam's trade deficit could top eight billion dollars this year, a figure it said was high but 'acceptable for a developing economy on its way to international integration.'

Last year, Vietnam's trade deficit stood at 5.09 billion dollars.

'One reason the trade deficit was high was that the quality and the competitiveness of domestically produced goods were limited so that they could not compete with imported goods,' the official said.

Among imports, the sharpest gains was a 52.4 percent rise in steel to 2.44 billion dollars in the seven-month period while machinery and equipment rose 42.2 percent to 5.04 billion dollars.

Imports of oil and petroleum products reached 4.06 billion dollars, up 11.9 percent. Vietnam has large off-shore crude oil deposits but so far lacks an operating refinery so must buy products.

On the export side, Vietnam earned less from key commodities, with revenues from crude oil exports down 11.3 percent to 4.43 billion dollars and rice slipping 0.9 percent to 904 million dollars.

However the country earned 4.24 billion dollars from garment and textile products, up 28.6 percent, and 2.36 billion dollars from footwear, up 14.4 percent.

Coffee from Vietnam, the world's number two exporter after Brazil, increased 102.1 percent to 1.32 billion dollars.

For the month of July alone, Vietnam posted an estimated trade deficit of 800 million dollars, with exports worth 4.25 billion dollars and imports totaling 5.05 billion dollars.

The GSO also released a revised trade deficit figure for June of 790 million dollars, down from the earlier estimate of 950 million dollars, with a revised 4.16 billion dollars in exports and imports at 4.95 billion dollars.

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