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News // Asia

Vietnam's Trade Deficit More than Doubled Due to Oil Exports Decline

24 August 2007 , 10:58635
Vietnam's trade deficit more than doubled through August as crude oil exports declined and imports of machinery and steel surged, Bloomberg reported.

The gap widened to $6.41 billion through the first eight months of 2007 from $2.8 billion in the same period a year ago, the General Statistics Office said today in Hanoi. Exports rose 19 percent to $31.22 billion, while imports climbed 30 percent to $37.63 billion.

The trade deficit together with accelerating inflation may limit economic growth in Vietnam in the second half of the year, Ho Chi Minh City-based fund managers Vinacapital said in a report last week. Inflation reached 8.6 percent this month, the highest figure since January 2006.

``While it's true that many of the imports lead to eventual exports, that's a 12- to 15-month effect,'' said Fiachra MacCana, managing director and director of broking at Vinasecurities in Ho Chi Minh City. ``In the short term, the more Vietnam imports, the greater the risk for an acceleration of inflation.''

Vietnamese Deputy Prime Minister Nguyen Sinh Hung said last month the country is targeting export growth this year of as much as 23 percent. The failure to reach the goal so far is in large part due to a drop in crude oil exports. Vietnam Oil & Gas Group said in June that the nation's oil production is running behind schedule.


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