Trade deficit is still within control: economists

Vietnamnet/VOV

“Unlike two years ago, many analysts have warned that Vietnam will witness a trade deficit. However, I believe the trade deficit will still be within control,’ said Vo Tri Thanh, a respected economist.

The Ministry of Industry and Trade (MOIT) has reported that the export turnover hit USD21.5 billion in May, an increase of 5.2% over the month before, of which domestic economic sector made up USD6.71 billion, up by 3.9%, while foreign invested economic sector, including crude oil, made up USD14.79 billion, up by 5.8%.

If compared with the same period last year, the export turnover last May increased by 7.5%, of which 10.7% was from the domestic economic sector and 6.1% was from foreign invested enterprises.

As such, the first five months of the year, Vietnam exported USD100.74 billion worth of products, increasing by 6.7% over the same period last year.

Regarding the imports, the turnover in May was USD22.8 billion, an increase of 8.6% over the month before and 8.3% over the same period last year.

In the first five months, the import turnover was USD101.28 billion, up by 10.3% over the first five months of 2018.

As such, Vietnam saw the trade deficit of USD1.3 billion in May and USD548 million in the first five months.

Unlike previously, when the excess of imports over exports always raised big worries, economists now are calm amid the trade deficit.

Thanh commented that the 6.7% export growth rate in the first five months of the year was ‘relatively low’ compared with the previous years, but the figure was ‘very encouraging’ compared with other regional countries.

Many economies even saw the minus export growth rates in the first three months of the year, including Japan, Indonesia, Taiwan (China) and Singapore, while China’s export turnover increased very slightly by 1.4%.

“The figures show that the decline in the global economic growth also bears the impact from special phenomena, including the US-China trade war,” Thanh said.

“I think the trade deficit is still within control,” he said, pointing out that the situation is not worrying.

In its report released lately, Rong Viet Securities also showed an optimistic view about Vietnam’s trade balance, especially from the third quarter of 2019.

Its researchers believe that Vietnam will export more in the upcoming months, while the imports will decrease because of the seasonal reasons and the state’s control.

The exports of farm produce and electronics, which make up 40% of total export turnover, may see better growth. Farm produce and fruit exports to China have bounced back, reaching USD450 milion in April.