Economists ease concerns on trade deficit return

Monday, 2018-05-07 16:03:57
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Trade deficit may return but not worrying.
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NDO – Vietnam posted a trade surplus of US$3.39 billion in the first four months of this year. Despite the fact that there will likely be a return of a trade deficit, experts have forecast a more positive direction for a trade deficit return.

According to the General Statistics Office of Vietnam, the nation’s trade balance traded a surplus worth US$3.39 billion by the end of April, but the domestic sector suffered a trade deficit at US$7.78 billion.

However, economist Le Dang Doanh said that the trade balance was encouraging, but he also raised concerns that the current trade surplus is mainly due to the contribution of FDI enterprises, while domestic enterprises are mainly in trade deficit.

Along with that, the global market is still fluctuating, as the US will tax several goods to reduce its trade deficit and the risk of a confrontation of trade between the US and China would partly affect Vietnamese trade in 2018.

According to Assoc. Dr. Pham Tat Thang, from the Trade Research Institute under the Ministry of Industry and Trade, it is not completely secured that Vietnam will even enjoy a trade surplus for the whole year. With boost from trade agreements, such as Vietnam-EU FTA or CPTPP, the investment into Vietnam and its import ability regarding modern technology and machinery will increase, resulting in a likely trade deficit as these goods come at a huge value.

However, such a trade deficit is a good sign, not as a trade deficit in the negative direction as in previous years, Thang said, explaining that previously, the imports were mainly raw materials and backward technology, but trade deficit will change in quality to create momentum for sustainable development in the near future.