Vietnam faces widening Q1 trade gap as exports slow
HANOI - Vietnam's trade deficit in the first three months of this year is forecast to rise 67 percent from a year ago to $7.5 billion, while exports are slowing due to a weak U.S. dollar and rising costs, a state-run newspaper said on Saturday.
Exports in the first quarter would grow 23.7 percent from a year earlier to $13.2 billion, slowing from a 29.2 percent rise in the first two months from a year ago, Pham The Dung, a manager at the Industry and Trade Ministry was quoted by the Ho Chi Minh City People's Committee-run Liberation Saigon daily as saying.
Excluding crude oil, Vietnam's top export item, exports would only rise 15 percent in the first three months, Dung, who heads the ministry's Export and Import Department, told a ministry meeting with exporters in Ho Chi Minh City on Friday.
The widening trade gap "shows a government request to boost exports by 25 percent to around $60.7 billion would be achieved with difficulty", the report quoted officials as saying at the meeting.
The Industry and Trade Ministry has raised its forecast for Vietnam's annual trade deficit to $20 billion from $16.97 billion earlier projected. Last year, the gap more than doubled to $12.4 billion as imports jumped 35.5 percent to a record $60.8 billon.
Representatives from the cashew, seafood and plastics sectors said at the Friday meeting that the weak dollar coupled with rising production costs will disrupt production while the government tightens money supply to rein in inflation .
Vietnam's main exports to the United States, Europe and other markets include garments and textiles, wood furniture, seafood, rice, coffee, crude oil and other commodities.
"Vietnam cannot directly support exports but it could do something with credit as other governments often do," Luong Van Tu, chairman of the Vietnam Coffee Association, said at a news conference in Hanoi on Wednesday.
Deputy Industry and Trade Minister Nguyen Thanh Bien said on Friday that the government would soon take measures to help, including asking banks to provide soft loans to exporters and buy their dollars, the daily reported.
Reuters - March 15, 2008.