Vietnam trade deficit widens as export growth weakens
(VOV) - Sagging export growth spurred a wider-than-forecast trade deficit of US$4.0 billion during the eleven months leading up to December, according to a recent report released by the General Statistics Office (GSO).
The gloomier trade picture is the result of a weaker than expected domestic economy resulting in exports falling far short of expectations, a strong US dollar and weak global growth say experts.
Though the value of overseas shipments for the nation’s FDI businesses for the eleven month period jumped 8.3% year-over-year tallying in at US$105.1 billion, those gains were eroded by a 2.6% dip into the red of exports by domestic companies.
Combined overall revenues for the nation’s FDI and domestic businesses of US$148.7 billion for the period fell far short of the target of US$162 billion budgeted for the year, said the GSO.
The US remained Vietnam’s largest export market with sales of US$30.6 billion (up 17.6%), followed by in descending order of importance the EU, ASEAN, China, Japan and Republic of Korea.
“A strong US dollar has made it more expensive for companies in Vietnam such as manufacturers to sell goods to foreign customers,” say experts.
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The impact tends to be felt hardest by the smaller domestic companies who have more difficulty accessing overseas markets.
In addition, they say a weak global economy has made it much more difficult for customers outside of Vietnam to buy lesser known brand products made by domestic companies.
“Meanwhile imports lunged 13.7% year-over-year to US$152.5 billion for the period January-November, contributing significantly to the higher than expected trade deficit,” said the GSO.
Imports for FDI businesses increased 8% to US$62.3 billion while those of domestic companies shot up over twice the rate at 18.1% to US$90.2 billion, the statistics show.
China was the biggest market with an estimated import value of US$45.1 billion, up 14%.
Experts say the performance of domestic businesses is quite weak compared to FDI businesses and their counterparts in the region such as Thailand, India, Philippines and the Republic of Korea.
The trade balance will continue to deteriorate unless the government takes effective action to remedy the situation they say.