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Trade deficit of $6.6b forecast for first half   2011-06-26 - VNS

Viet Nam's export value in June was estimated to hit US$7.8 billion, lifting the total export value in the first half of this year to more than $42.33 billion, a rise of 30.3 per cent over the same period a year earlier, according to the General Statistics Office.

The import value in June was forecast to reach $8.2 billion, bringing the total value for the first six months to almost $49 billion, a year-on-year increase of 25.8 per cent.

According to these figures, the trade deficit for the first half of the year is estimated to reach over $6.65 billion – the highest it has been since the beginning of this year. The trade deficit was just $1 billion in January, $1.83 billion for the first two months, $3.03 billion for the first three months, $4.9 billion for the first four months and nearly $6.59 billion for the first five months.

The January-June trade gap accounts for 15.7 per cent of the export value during the period, lower than the Government's target of 16 per cent set for the whole year. However, according to the statistics office (GSO), the trade deficit actually made up 18.1 per cent if the value of gold exports was excluded during that period.

Le Minh Thuy, head of the GSO's Trade Department, blamed the high trade deficit in the first half on the high import demand of domestic enterprises which was worth nearly $27.58 billion, a rise of 22.9 per cent year-on-year, and higher than the import value of foreign-invested enterprises which was worth $21.41 billion, a rise of 29.7 per cent year-on-year.

The import value of machinery-equipment-devices, and accessories and spare parts was the highest, reaching over $6.93 billion, a rise of nearly 11 per cent year-on-year. Due to the increased global prices, the value of fuel imports reached $5.49 billion, a rise of 40.3 per cent year-on-year, despite the volume being down 2.1 per cent.

The import value of many of raw materials used for domestic production also rose due to increased global prices, including plastics up 31.5 per cent; fabric, 38.1 per cent; steel, 7 per cent; electronics, computers and spare parts, 23.2 per cent and cotton, 103.6 per cent.

Agricultural imports also climbed, with the import value of wheat reaching $467 million, a rise of 58.5 per cent; cooking oil $404 million, up 39.1 per cent; vegetables $407 million, up 14 per cent and seafood $206 million, up 35.5 per .

Automobile imports reached almost $1.55 billion, a rise of 16 per cent, of which imports of CBU (complete built unit) reached 31,600 units worth $593 million, an increase of 37.1 per cent in volume and 45.9 per cent in value.

Export on the rise

Thuy said the trade deficit was cushioned by rising export value of 30.3 per cent, tripling the Government's target of 10 per cent for this year, of which the export value of domestic enterprises reached $19.38 billion, a rise of 29.4 per cent, and foreign-invested enterprises reached over $22.95 billion, a rise of 31.1 per cent.

The export of agriculture and fishery products rose significantly due to the increased global prices, including seafood rising 28 per cent to nearly $2.59 billion; rice up 16 per cent to $1.97 billion; coffee up 103 per cent to $1.93 billion and cassava up 40.4 per cent to $580 million.

Crude oil exports earned over $3.38 billion on a volume of over 3.94 million tonnes during the period, a rise of 26.2 per cent in value but a decrease of 10.5 in volume.

Garments and textiles earned a total export value of $6.11 billion, a rise of 28.4 per cent, and footwear exports made nearly $2.99 billion, up 31 per cent.

According to economists, promoting exports of high value-added goods and less dependence on imports of raw materials would be the most effective way to reduce the trade deficit. However, Viet Nam's efforts to reduce trade imbalance in the coming time were likely to meet with difficulties due to persisting high import demand for raw materials and rising prices on the global market.

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