Vietnam Swings to Trade Deficit for First Time in Three Months
Vietnam reported that its trade balance swung to a deficit in August for the first time in three months as imports rose, signaling domestic demand may be growing after authorities eased monetary policy.
The shortfall was $150 million in August compared with a revised surplus of $579 million in July, the General Statistics Office said in Hanoi today. The median estimate of five forecasts in a Bloomberg News survey was for trade to be balanced. For the first eight months of the year, the deficit was $62 million.
Vietnam’s economy expanded 4.38 percent in the first half of 2012, down from 5.63 percent in the same period a year ago. The monetary authority has cut interest rates and told banks to reduce lending rates to spur growth, and while demand for Asia’s goods has faltered, faster credit growth in Vietnam will probably boost expansion in the second half, Australia & New Zealand Banking Group Ltd. wrote in a report last month.
“Given Vietnam’s stage of development, Vietnam would have a trade deficit if the economy was performing well,” Prakriti Sofat, a Singapore-based economist at Barclays Plc, said before the data. “Once you see growth pick up again, you’ll probably also see a gradual increase in investment and a return to manageable trade deficits.”
The dong traded at 20,905 per dollar as of 7:07 a.m. local time. The currency has gained almost 1 percent this year, outperforming peers including the Indonesian rupiah.
Exports fell to $9.8 billion in August from $10.19 billion in July, the statistics office said today. For the year to date, shipments have increased 17.8 percent to $73.35 billion.
Imports rose to $9.95 billion in August from $9.61 billion in July, the statistics office said. Imports have risen 6.7 percent to $73.41 billion so far this year.
--Jason Folkmanis in Ho Chi Minh City. With assistance from Minh Bui in Sydney. Editors: Rina Chandran, K. Oanh Ha
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