Vietnam's trade gap widens this month

Vietnam's trade gap widens this month

HANOI (Reuter): Vietnam's trade gap widened this month as a run of strong export growth lost some momentum, while industrial production was brisk but remained on a downward trend, General Statistics Office data showed yesterday.

The statistics office said the trade deficit for the first nine months of this year was estimated at US$1.813 billion after a gap of $1.721 billion in the January-August period.

There were no direct comparisons for the same period of 1996, though the deficit for January-September 10 of last year was almost double the latest figure at a record $3.537 billion.

The deficit for the whole of 1996 was $4.0 billion, equivalent to around 17 percent of gross domestic product (GDP).

Alarmed by a sudden surge in imports last year, the government imposed higher tariffs, lower import quotas and temporary bans on some items such as construction steel and sugar.

Western economists say that Hanoi, which has committed itself to joining the ASEAN free trade area (AFTA) within 10 years, will only make sustainable inroads into its trade deficit by liberalizing its trade regime and modernizing its state sector.

They say that structural rigidities which remain despite more than a decade of reform along market lines, combined with a slowdown in foreign investment, are now putting a brake on economic growth.

The statistics office said industrial output grew at a year-on-year rate of 12.8 percent in the first nine months of this year compared with 13.5 percent in the same period of 1996.

The latest production figure confirmed a steady downtrend of recent months, though the statistics office predicted that output over the whole year would grow at 13.2 percent.

Figures released on Wednesday showed that consumer prices rose by 4.0 percent in the year through September.

Government minister Lai Van Cu, predicting that consumer prices would rise by less than 4.0 percent in 1997, told a news conference last week that an inflation rate of less than five percent was "unhealthy" for a developing economy.