The shortfall more than tripled to US$4.29 billion from $1.2 billion a year earlier, according to figures from the General Statistics Office (GSO).
Exports advanced 29 percent to $8.71 billion, while imports jumped 64 percent to $13 billion.
The figures were released on a day when Vietnam also reported that inflation accelerated to a year-on-year rate of 15.7 percent this month, the highest since 1995.
Together, the figures point to strong increases in demand, as Vietnam’s economy expands at the fastest pace in more than a decade.
“Vietnam is in a vulnerable position because virtually all of the raw materials that are used by a range of industries have to be imported, and international prices are rising right now,’’ said Fiachra MacCana, head of research at HCMC Securities Corp.
“It might be in the long-term interest of Vietnam at this point for economic growth to slow down in order to cut inflation and reduce the trade deficit,’’ MacCana said Wednesday.
Imports of machinery and equipment rose 33 percent to $2.2 billion, while purchases of petroleum products from abroad climbed 14 percent by volume and 71 percent by value to $1.63 billion.
Steel imports surged 115 percent by volume and 161 percent by value to $1.47 billion, Wednesday’s report showed.
The Ministry of Industry and Trade forecasts the country’s trade deficit may hit a new record of $17 billion this year, up from over $12.4 billion in 2007.
But several economists estimate that the import minus export figure may be even higher, between $18 and $19 billion.
Whatever the final figure, experts agree that Vietnam has been importing much more than is advisable for its economy.
In recent years, the country’s imports have increased by leaps and bounds.
Import surplus almost tripled from 2006 to 2007.
The Southeast Asian country’s “strong economic growth and rapid urbanization’’ have created opportunities for property developers, according to Singapore’s CapitaLand Ltd., which has established a $300 million fund to invest in Vietnam’s real estate market.
Property may not be the only reason for an increase in steel imports, because a lot of the projects out there are still in the proposal stage, said Brett Ashton, HCMC-based managing director of the Vietnam unit of the UK’s Savills Plc.
“There are also plenty of new factories and roads being built,’’ Ashton said. “But the property market probably has something to do with it.’’
On the export side, crude oil shipments gained 46 percent by value to $1.68 billion, even while volume slipped 11 percent.
The global price of crude oil, of which Vietnam is Southeast Asia’s third-biggest producer, has been about two- thirds higher on average this year than in the same period in 2007.
Garment and textile exports jumped 42 percent to $1.46 billion, according to the GSO figures.
Since its accession to the World Trade Organization, Vietnam has been freed of quota restrictions on its textile exports, and these have grown very rapidly,’’ Janet Yellen, the president of the Federal Reserve Bank of San Francisco, wrote in a letter dated February 22 and posted on the bank’s website.
Footwear shipments advanced 25 percent to $769 million, while exports of coffee, of which Vietnam is the world’s second-biggest producer, slumped 24 percent by volume and 5 percent by value to $508 million, the statistics office said.
“Vietnamese farmers are much better off than they were at this time last year, and are holding onto much of their product, as they watch the price go steadily higher,’’ Fortis Bank and VM Group said in a report this month on agricultural commodities.
Sunday, March 02, 2008
Vietnam's trade deficit more than tripled in first two months
Posted by Saigon Charlie