Vietnam trade falls sharply as economy faces slowdown

VIETNAM’S exports and imports in the first four months of this year fell sharply from a year earlier, customs data showed on Tuesday (May 9), weighing further on its growth target as it faces weak global demand.

Exports in the first four months fell 13 per cent from a year earlier to US$107.1 billion, the Customs Department said in a report.

Regional manufacturing heavyweight Vietnam is trying to avert a slowdown in growth from weak demand in its key markets, after first quarter gross domestic product expansion slowed to 3.3 per cent from 5.9 per cent in the fourth quarter last year.

It is targeting GDP growth of 6.5 per cent this year, slower than an the 8.02 per cent last year.

Shipments of smartphones, Vietnam’s largest export earner, fell 18.1 per cent in the period to US$17.3 billion, according to the customs report.

Imports in the January-April period fell 17.7 per cent to US$99.6 billion, resulting in a trade surplus of US$7.5 billion, according to the customs report.

A sharp decline in imports could indicate a further slowdown ahead in industrial production, as businesses reduce their raw material and equipment procurement.

Vietnam’s lawmakers earlier on Tuesday urged its central bank to consider cutting policy rates further to support the economy, after it cut several policy rates in March.

Vietnam, with a population of 100 million, is also planning to cut its value added tax on goods and services to 8 per cent from 10 per cent to boost consumption, to compensate for the exports decline.

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In April, exports fell 6.2 per cent from March to US$27.86 billion, while imports were down 11.0 per cent at US$25.21 billion, according to the customs department.

A wide trade surplus, however, has this year been supportive for the central bank to build up its foreign reserves.

The investment minister on Friday said the central bank bought US$4.9 billion of greenbacks from credit institutions in the first four months this year. REUTERS