Declines in agriculture and mineral exports major contributor to deficit.
The Ministry of Industry and Trade (MoIT) has announced that Vietnam recorded a $3.75 billion trade deficit in the first six months, or 4.8 per cent of export turnover, while the target set by the National Assembly was 5 per cent for the year as a whole. Much effort is needed, therefore, for the annual target to be met.
According to Mr. Nguyen Tien Vy, Head of the Planning Department at MoIT, in the first half export turnover stood at $77.7 billion, up 9.3 per cent year-on-year. Import turnover, meanwhile, was estimated at $81.498 billion, up 17.7 per cent compared to the first half of last year, or $2.3 billion.
Agriculture, forestry and fisheries fall sharply
A major factor behind the deficit is declines in the export of many agricultural products and minerals.
Export turnover for agricultural products and seafood in first six months was estimated at $10.031 billion, down 7.8 per cent against the same period of 2014 and accounting for 12.9 per cent of total export turnover.
Similarly, export turnover of minerals and fuels were down 45.5 per cent year-on-year and estimated at $2.77 billion.
In the six months domestic enterprises saw export turnover fall over the same period of 2014, by 2.9 per cent and estimated at $22.864 billion, accounting for 29.4 per cent of the total.
Exports by foreign-invested enterprises, meanwhile, accounted for 67.8 per cent of the total and were estimated at $52.71 billion, up 20.8 per cent over the same period last year.
Mr. Vỵ believes that increases in imports and exports by the domestic sector being lower than the foreign enterprise sector demonstrates that production by domestic enterprises remains problematic.
Controlling the deficit
Mr. Phan Van Chinh, Director of the Export and Import Department under MoIT, said that in the first six months export turnover fell overall but showed signs of improvement in May and June. He emphasized, however, that the signing of trade agreements create favorable conditions for expanding the consumption market. A wave of foreign enterprises is also coming to Vietnam and many seek opportunities to invest in production. Domestic businesses will therefore be subject to greater competitive pressure.
He said that MoIT will continue to bolster measures to develop markets and promote exports, focusing on market diversification, opening up new markets, reforming administrative procedures, and removing difficulties facing enterprises.
- trade deficit
- first six months