Vietnam has recorded a trade
deficit of nearly USD2 billion so far this year following the trade surplus
of USD2.7 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
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.