Vietnam's trade deficit is forecast to jump to a record $8 billion this year from just $4.8 billion in 2006 due to an expected surge in machinery imports, a government report said. "In the long run, this is a necessary step for overall economic growth," the Trade Ministry's Planning and Investment Department said in a report seen on Monday.
Economists said most of the machinery imports this year would be for the energy sector, including Vietnam's first oil refinery, the $2.5-billion Dung Quat plant, and a host of new power plants.
Vietnam reported a trade deficit of $4.78 billion in the first half this year with machinery imports up 46.5 percent from a year earlier to $4.4 billion.
The Trade Ministry report also attributed the widened trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
The Southeast Asian country, which joined the global trade body in January, aims to boost economic growth to 9 percent in the second half of 2007 after an expansion of 7.87 percent in the first half to achieve an annual growth of 8.5 percent.
Source: Thanh Nien
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