Surging exports hold Vietnam trade deficit steady

Surging exports kept Vietnam’s trade deficit relatively steady at 12.4 billion dollars this year, the government said on Tuesday, but concerns over the country’s economic stability remain.

Exports rose 25.5 percent year-on-year to 71.6 billion dollars while imports were up 20.1 percent to 84.0 billion dollars, the general Statistical Office (GSO) said in a preliminary report.

Last year it reported the trade deficit at 12.2 billion dollars, 1.6 percent below Tuesday’s figure.

While exports of crude oil fell more than 20 percent in 2010, rice, garments and textiles, and footwear were all up by 20 percent, the data showed.

“The rebound of non-oil exports has been both strong and broad-based,” according to a recent report from the World Bank, which expects China to be Vietnam’s largest trading partner this year.

It said constraints on production capacity were partly to blame for the lower oil shipments.

A deficit in the current account — the broadest measure of external trade — is adding to Vietnam’s economic challenges, which include falling foreign exchange reserves, high inflation and a struggling currency, the Bank said.

Vietnam’s donors warned this month that the country’s economic growth will be threatened unless the government can control rising inflation and currency weakness.

Inflation hit 11.8 percent in December on a year-on-year basis, according to an official estimate.

Ratings agencies Moody’s and Standard & Poor’s recently downgraded their government debt ratings for Vietnam because of worries about the economy, the banking sector and the problems of state-owned shipbuilder Vinashin.

Official data also showed that industrial production rose 14 percent year-on-year in 2010 to 39.7 billion dollars, led by the non-state sector. – AFP

Tags: Vietnam trade, Vietnam trade deficit 2010