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Trade deficit falls, but not far enough   2010-05-13 - Thoi bao Kinh te VIetnam

The trade deficit decreased in the second half of April 2010, which should be good news, but it is still too high, above the permitted level of 20 percent of export turnover.

The General Department of Customs has released the import-export situation report for April 2010, which listed five main observations.


First, the trade deficit in April was lower than forecast by the General Statistics Office ($1.25 billion), thanks to decreases in both import and export turnover.


In the second half of April, Vietnam maintained high exports, reaping $2.7 billion in turnover. Meanwhile, imports decreased slightly with $3.01 billion in turnover, just 46 percent of the monthly import turnover.


The report showed that April’s export turnover was $5.33 billion, a decrease of 4.6 percent from March, while the import turnover reached $6.5 billion, a decrease of 3.7 percent from the previous month.


As such, the trade deficit was just $1.16 billion, the same as that in March. However, the bad news is that the trade deficit was still firmly over one billion dollars, just as it was in the previous two months: $1.33 billion in February, and $1.16 billion in March.


Second, the total export turnover in the first four months of 2010 has reached $19.7 billion, an increase of 6.6 percent in comparison with the same period of 2009. The total import turnover was $24.4 billion, an increase of 33.2 percent. This means that the trade deficit for the last four months was $4.7 billion.


As such, the gap between the growth rate and import growth rate narrowed to five times from 25 times in the first quarter. However, the trade deficit still accounts for 23.8 percent of the total export turnover, still higher than the 20 percent ceiling set by the National Assembly.


Since the beginning of 2010, Vietnam imported gold with relatively high import turnover, while it had exported a big volume of gold this time last year.


Third, foreign-invested enterprises maintained high increases in import and export turnover. Though the crude oil export volume decreased by 48.7 percent and the export value decreased by 11.6 percent, foreign-invested enterprises’ export turnover was still high at $9.26 billion, an increase of 36.2 percent over the same period of 2009. This accounts for 46.9 percent of the total export turnover.


The import turnover of foreign-invested enterprises was also very high, over $10 billion, accounting for 41 percent of the total import turnover.


Fourth, the export volume and value of many products decreased sharply, especially farm products such as coffee, rice, cassava, and materials such as coal, crude oil and plastics. Products with the sharpest import turnover decreases were petroleum, gas, fertilizer and motorbikes.


Five product items reached export turnover exceeding one billion dollars, including seafood, rice, crude oil, garment and footwear products. Meanwhile, six products had an import turnover exceeding one billion dollars.


Fifth, Vietnam exported more to the US than it imported, with a trade surplus of $2.8 billion in the last four months. Yet Vietnam imported more to China than it exported, with the high trade deficit of $3.66 billion.

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