Vietnam faces return of trade deficit
Date: 3/30/2017 12:30:21 PM
Vietnam has recorded a trade deficit of nearly $2 billion so far this year following the trade surplus of $2.7 billion in 2016.
According to the General Statistics Office, after many years of trade deficit, Vietnam reported a trade surplus of USD2.7 billion in 2016.
However, since the beginning of this year, the country has witnessed a sharp rise of trade deficit of nearly 2 billion.
In many cases in the increase in the trade deficit was due to the higher demand for the local economy’s production activities, which was a positive indicator.
But the remarkable rise in trade deficit in the context of the country’s economic slowdown is worrisome.
In the first two months of this year, industrial production value only increased 2.4% against the same period of last year.
In February, the country licensed 5,460 new businesses, down 39.3% on-year.
Meanwhile, foreign direct investment also decreased, compared to the same period last year.
The high trade deficit so far this year is partially attributed to the increasing import of cars from ASEAN
countries due to lower taxes.
Following the ASEAN Trade in Goods Agreement, Vietnam will fully remove tariffs on imported cars from ASEAN countries from 2018.
Meanwhile, the exports have seen a slow growth because of problems related to the quality of Vietnamese goods and trade barriers from foreign countries.