Vietnam trade gap widens, investment pledges rise: state media
HANOI (AFP) — Vietnam's trade deficit has more than tripled year-on-year to an estimated 16.9 billion dollars for the first half of 2008, state media reported Monday, quoting data from the communist government.
The yawning trade gap, driven by surging imports, along with double-digit inflation, threaten balance of payment troubles and have put downward pressure on Vietnam's dong currency, financial experts have warned.
However, despite the economic woes, foreign investors pledged more money in the first half of the year than all of 2007, reports said.
Vietnam's January to June imports totalled 45.5 billion dollars, a 64 percent rise against the first half of last year, the Lao Dong (Labour) daily reported, quoting Ministry of Planning and Investment (MPI) figures.
Exports -- including crude oil, textiles and footwear -- rose 27 percent to 28.6 billion dollars, according to the early estimate, the newspaper said.
The 16.9-billion-dollar trade gap for the first half of the year was more than three times higher than for the first six months of 2007 -- and more than the total for Vietnam last year, which was 12.4 billion dollars.
The widening trade deficit in the fast-growing economy has caused "an imbalance in the payment account and is believed to be the main cause of recent fluctuations in the exchange rate," the newspaper said.
Last week, central bank officials said Vietnam has foreign exchange reserves of 20.7 billion dollars, enough to keep the dong stable.
The State Bank of Vietnam Monday set a rate of 16,450 dong to the dollar.
The central bank has also restricted the informal trading of the greenback, which last week was valued in gold shops and by other black market money-changers at around 19,000 dong, and at over 18,000 dong Monday.
Vietnam's economy grew 8.5 percent last year, when the country joined the World Trade Organisation, but the government has lowered this year's target to 7.0 percent as it fights inflation, which topped 25 percent in May.
On the flip side, newly registered foreign direct investment in the year's first half reached 31.6 billion dollars -- 10 billion dollars more than the amount pledged in all of 2007, the MPI's preliminary figures showed, according to Lao Dong.
The ministry also forecast economic growth of between 6.6 and 6.7 percent for the first half of 2008, the paper said.
