Vietnam trade deficit bulges in first three months

Vietnam’s trade deficit in Q1 has gone through the roof, hitting US$1.32 billion with the import growth rate doubling that of exports, fanning fears of even bigger trade gap by year’s end.

The surge in total import turnover was, on the positive side, propelled by the import of large quantities of machinery, equipment, components and other materials meant for domestic production.

But on the flip side, the inefficient production of several major items resulted in the net import of steel billet, fertilizer, and cattle feed.

Rising demand also played a key role in driving the import of motorbikes and medicines skyward.

The fact that foreign goods are flooding Vietnamese markets by making the best of preferential import duties was also to blame to skyrocketing import turnover.

Low turnover in major exports like crude oil, rice and rubber were other factors that led to the huge trade deficit.

Crude oil’s export turnover reportedly dropped by $296 million from the same period last year while that of rubber declined by $19 million.

Revenues for rice exports only hit $229 million in the first quarter this year, a nosedive of $114 million from last year.

Turnover of bicycles and their spare parts suffered as well, seeing a decrease by $18 million.

Other major export items like cashew, pepper, tea, and footwear have also recorded lower-than-usual earnings in Q1.

Besides, financial experts also attributed low export turnover to weak competitiveness of Vietnam-exported goods that led to their failure to penetrate foreign markets despite soft import duties.

Source: thanhniennews.com