Thursday, July 31, 2003
Vietnam trade deficit to soar, central bank not worried
Reuters Hanoi, July 31
Vietnam said on Thursday it expected its 2003 trade deficit to jump nearly 70 per cent to $4.7 billion, but the central bank said that posed no economic threat because of rising overseas remittance and capital inflows. Imports were forecast to grow 21.6 per cent to a record $24 billion and exports were likely to rise 15 per cent to $19.2-$19.3 billion, the Trade Ministry said in a report.
"This year's trade deficit reaching around $4 billion is not a concern because experts have taken into account this figure when establishing Vietnam's trade balance payment," State Bank of Vietnam Deputy Governor Phung Khac Ke told Reuters.
"With capital balance and overseas remittances on the rise, the overall balance payment this year could see a little surplus, and much better in comparison with last year," he said on the sidelines of a loan signing ceremony in Hanoi.
Ke declined to provide any absolute figures.
Central bank figures showed Vietnamese living overseas sent home a record $1.1 billion in the first half, up 12 per cent on a year earlier. The bank has forecast total remittances in 2003 would exceed last year's $2.4 billion.
On the capital inflow front, Vietnam has seen foreign direct investment in the first five months of the year rising six per cent to $900 million from a year earlier.
The Trade Ministry report, published on its Web site (www.mot.gov.vn), said a surge in world prices of imported steel, oil products and machinery, coupled with higher domestic demand for the items, would boost the value of imports.
Imports in the remaining five months of 2003 are forecast to rise to $10 billion, against exports of nearly $8 billion, the report said. Vietnam posted a trade deficit of $2.77 billion in 2002.
On Tuesday the Asian Development Bank forecast Vietnam's economy would grow 6.9 per cent this year, second only in the region to 7.5 per cent growth in China.
© Hindustan Times Ltd. 2003. Reproduction in any form is prohibited without prior permission