Vietnam forecasts 2009 US$19.9b trade deficit

 

HANOI: Vietnam’s trade deficit is expected to widen to US$19.9 billion next year from US$19 billion this year as growth in both imports and exports slow sharply from current rates, a government trade report said.

Hanoi has been striving to boost exports and curb the import of luxury goods such as cars and mobile phones to help limit the trade deficit to below US$20 billion.

Growth in exports is expected to slow to 18 per cent in 2009 from an estimated 32 per cent in 2008, while growth in imports is seen slowing to 15 per cent from 31.8 per cent this year.

Rice exports in 2009 are expected to stay flat at 4.5 million tonnes, coffee shipments would rise 9 per cent to 1.2 million tonnes, and crude oil exports would drop 14.3 per cent to 12 million tonnes, the Industry and Trade Ministry report said.

The report, released via the Industrial and Trade Information Centre, said overall exports next year would rise to US$76.7 billion while imports would grow to US$96.6 billion, leaving the annual trade deficit at US$19.9 billion.

“Key raw material items will still be imported from Asia given the advantage in distance, taste and price, followed by the EU and America,” the report said, adding that priority would be given to buy technologies from the United States and Europe.

This month the communist government cut its gross domestic product growth target for 2009 to 6.5 per cent from 7 per cent, slowing from an expected growth of 6.7 per cent this year as it tries to cope with high inflation and a widening trade deficit.

The Industry and Trade Ministry’s export growth forecast for 2009 is above a government target of 13 per cent approved by the National Assembly earlier this month.

The ministry often makes its targets higher to give more room for exporters’ performance in the export-driven tiny economy of US$71 billion. - Reuters