UPDATE 1-Vietnam trade falls sharply as economy faces slowdown

(Recasts, adds details and background) HANOI, May 9 (Reuters) - Vietnam's exports and imports in the first four months of this year fell sharply from a year earlier, customs data showed on Tuesday, weighing further on its growth target as it faces weak global demand. Exports in the first four months fell 13% from a year earlier to $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% from 5.9% in the fourth quarter last year.

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

Shipments of smartphones, Vietnam's largest export earner, fell 18.1% in the period to $17.3 billion, according to the customs report.

Imports in the January-April period fell 17.7% to $99.6 billion, resulting in a trade surplus of $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% from 10% to boost consumption, to compensate for the exports decline.

In April, exports fell 6.2% from March to $27.86 billion, while imports were down 11.0% at $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 $4.9 billion of greenbacks from credit institutions in the first four months this year.
(Reporting by Khanh Vu and Phuong Nguyen; Editing by Martin Petty)

Reuters

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UPDATE 1-Vietnam trade falls sharply as economy faces slowdown

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