Vietnam expects its trade deficit to widen to as much as $12.8 billion next year, government estimates showed today. The dong fell.
The shortfall may reach $12.4 billion to $12.8 billion, or about 11.5 percent to 12 percent of total exports, the government said in a report released to reporters in Hanoi Thursday. The trade gap this year is forecast at $10 billion, equivalent to 10.5 percent of total exports. That compares with a deficit of $12.6 billion in 2010, according to data on the General Statistics Office's website.
Vietnam's trade deficit, which widened in September from August, and inflation of more than 20 percent have hurt the local currency and contributed to a 17 percent decline in the benchmark stock index this year. The nation aims to reduce the annual inflation rate to less than 10 percent next year, from an estimated 18 percent in 2011, the government reiterated today.
"You have a currency in which confidence has been questionable for some time," Louis Taylor, Standard Chartered Plc.'s chief executive for Vietnam, Laos and Cambodia, said in an interview on Oct. 18. "Get confidence back into the currency and you'll get confidence back into the market."
The dong fell a fourth day, declining 0.02 percent to 20,943 per dollar as of 2:55 p.m. on Thursday in Hanoi, the lowest level in Bloomberg data going back to 1993, after the central bank set its daily reference rate at the weakest level since at least 2005.
Pledged foreign direct investment to Vietnam is forecast to drop to $15 billion in 2012, from an estimated $17 billion this year, the government said in the report. Disbursed foreign investment is expected to be $11 billion next year, the same level estimated for 2011.