Vietnam maintains 2026 GDP target despite trade deficit, inflation pressure

[HANOI] Vietnam will stick to its economic growth target of 10 per cent this year, despite a widening trade deficit and other challenges, a deputy finance minister said on Wednesday (Jun 17).

The South-east Asian country’s trade deficit is estimated to have hit US$15 billion in the first half of this year, Nguyen Duc Chi told a press conference in Hanoi, swinging from a trade surplus of US$7.6 billion in the same period last year.

Chi said the deficit was caused by higher prices for fuel imports as a result of the war in the Middle East.

“However, I believe that export growth will accelerate during the rest of this year, narrowing the trade deficit for the entire year,” he said.

Apart from the widening trade deficit, higher fuel costs have also put more inflationary pressure on the economy.

The annual inflation rate came in at 5.6 per cent in May, higher than the government’s full-year target of 4.5 per cent.

Vietnam reported a trade deficit of US$13.8 billion in the first five months of this year, swinging from a surplus of US$5.1 billion over the same period of last year.

The export-driven economy is being targeted by the Trump administration for allegedly distorting trade with excess capacity, intellectual property violations and the use of goods made with forced labor.

Earlier this month, the US proposed tariffs of up to 12.5 per cent on imports from 60 countries, including Vietnam, after determining they had failed to curb trade in goods made with forced labor.

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Vietnam said the assessment did not fully or accurately reflect its mitigation efforts. REUTERS