16:07 | 10/03/2014 Finance - Banking
(VEN) - National Economics University Associate Professor, Dr. Nguyen Thuong Lang said that in the 2012-2015 period, Vietnamese balance of trade could achieve a surplus, contributing to creating an increase in value of Vietnamese dong.
According to Associate Professor, Dr. Nguyen Thuong Lang, in the 2011-2015 period, Vietnamese balance of trade could achieve a surplus as Vietnam has continuously reached trade surplus since 2012. In addition, Vietnamese dong will increase its price. This is an important signal in Vietnam’s economy, contributing to give out solutions to stabilize exchange rate, promote investment and expand trade.
Achieving a surplus
According to the General Statistics Office’s data, in the 2000-2011 period, Vietnamese balance of trade always achieved a deficit. However, the balance of trade reached a surplus of US$0.3 billion in 2012 and US$0.86 billion in 2013. Experts forecasted that in the 2014-2015 period, the balance of trade could achieve a surplus.
According to the World Bank’s forecast, the world economic recovery in 2014 could record a growth of 3.6 percent and its figure might be higher in 2015. In addition, according to HSBC forecast, Vietnam’s exports in 2014 would strongly increase. Vietnam’s export turnover in 2014 could increase by at least 12 percent compared to 2013. This is an important condition to increase foreign currency reserves.
In terms of imports, Nguyen Thuong Lang said that together with the participation of foreign-invested sector, many high quality goods have been produced in the country. Therefore, import turnover will rise more slowly than export turnover.
Investment wave into Vietnam is forecasted to continue increasing in 2014 and 2015 because political instability in Thailand and Cambodia remains complex. In addition, major investors in Asia such as the Republic of Korea and Japan tend to shift investment capital from China to Vietnam due to territorial disputes between these countries.
Vietnam has also participated in negotiation rounds and will sign several important agreements in the future such as the Trans-Pacific Partnership (TPP) Agreement, free trade agreements with the Republic of Korea and the European Union. “Together with an increase in exports and a decline in imports, Vietnamese balance of trade would continue achieving a surplus,” Nguyen Thuong Lang said.
Increasing in value of Vietnamese dong
Together with above analyses and an increase in value of other countries’ currencies, exchange rate largely depends on the balance of trade and capital. In terms of Vietnam, the balance of trade has a direct impact on the stability of Vietnamese dong.
According to Nguyen Thuong Lang, in the 2014-2015 period, Vietnam’s exports would reach an average increase of 15-20 percent and imports would reach a lower rate. Therefore, the balance of trade could reach a surplus in four consecutive years, contributing to increasing foreign currency reserves.
In addition, sudden changes in the direction of decline in the world market will no longer appear as the previous period due to the world economic recovery. “All these factors will contribute to increasing in value of Vietnamese dong,” Nguyen Thuong Lang said. This is an important signal in Vietnam’s economy, contributing to give out solutions to stabilize exchange rate, promote investment and expand trade.
The government and businesses need to adopt new policies and clear business strategies. For example, when Vietnamese dong increases its value, a new scenario is needed to loosen exchange rate, contributing to enjoying beneficial effects. In addition, mechanisms to track the behavior of trade partners and international and regional financial institutions such as the World Bank, the International Monetary Fund and the Asian Development Bank are needed, contributing to avoiding detrimental effects./.