Vietnam may post US$500mil trade surplus this year

HANOI: Vietnam could post a trade surplus of US$500mil this year, a state-run newspaper reported, citing revised government forecasts, as it seeks to reduce its reliance on imports from neighbouring China amid an ongoing diplomatic row.

The trade ministry forecast exports would rise 10.6% from 2013 to US$146bil, while imports could increase 10.2% to US$145.5bil, the trade ministry-run Industry and Commerce newspaper cited the ministry’s forecasts as showing.

The revised forecast follows a reported trade surplus of US$1.3bil in the first half. In January, the ministry projected an annual trade deficit of US$8.6bil.

An annual surplus this year would be the third in a row for Vietnam, which posted its first surplus in two decades in 2012.

Rising exports in 2012–2013 and a steady inflow of overseas remittances have helped swing Vietnam’s trade balance to a surplus and boosted its foreign reserves to US$30bil in January from US$9bil in 2011, central bank data show.

Hanoi had earlier projected its exports this year to slow 10% from 2013 to US$145.4bil, after a 15.4% rise in 2013, while imports would rise 17.3% to US$154bil.

In June, Vietnam devalued its currency for the first time in a year, lowering the interbank midpoint rate for trading its dong currency by 1%, saying that the move should help exports, its main economic driver.

Vietnam’s gross domestic product (GDP) grew 5.42% last year, one of the fastest rates in the region, but the US$170bil economy remains fragile, dependent on external markets and still grappling with toxic debt, bankruptcies and weak retail spending.

It has targeted 5.8% growth this year. Economists have said tension at sea between Vietnam and China could reduce Vietnam’s GDP value by 10% this year. — Reuters