Gold exports bring trade deficit down but not for long

“Significant gold export in June might not have had such a big impact on narrowing the trade deficit,” Phan Van Chinh, head of the Ministry of Industry and Trade’s Export – Import Department, told the Thoi bao Kinh Te Vietnam (Vietnam Economic Times)

This has helped reduce the overall trade deficit for the first six months of this year to 15.7%.

The sharp decline is attributed to the spurt in export of gold and gems last month, reaching $630 million, compared to $242 million in May.

However, the “significant gold export in June might not have had such a big impact on narrowing the trade deficit,” Phan Van Chinh, head of the Ministry of Industry and Trade’s Export – Import Department, told the Thoi bao Kinh Te Vietnam (Vietnam Economic Times) newspaper.

Chinh said that for the first six months of this year, gold exports reached $1 billion, accounting for 2.43% of the total export turnover, while for the same period last year the figures were $1.5 billion and 4.65%.

“The trade deficit of 15.7% is the lowest figure for the last five years,” he said, adding that this reflected the effectiveness of measures taken by the ministry to tighten imports.

The ministry’s effort has been recognised by the government, which has said that the target set by the National Assembly has been met. The National Assembly had said that the trade deficit for the first six months of the year should not exceed 18%.

But the government, in a first-half economic review, also noted that the trade deficit could increase in the future. It said foreign currency rates and price for imported goods had been fluctuating. All this might impact efforts to improve the balance of payments, control inflation, stabilise the market and boost production and commerce, it said.

Many senior officials also agreed that gold export was not sustainable and without it, the trade deficit was still over 18%.

“Looking carefully at the list, we can see that import of several luxury commodities that should have been curtailed, like automobiles and motorbikes, have increased 70%. Therefore, the trade deficit still needs more control,” said Ha Van Hien, chairman of the National Assembly’s Economy Commission.

He said that the foreign exchange rate was stable at present because of administrative management. – VIR

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market