Vietnam has lowest current account surplus in Asia

Vietnam has the smallest current account surplus in Asia at USD200 million, equal to just 0.1% of GDP, according to a quarterly research by ANZ Bank.

Vietnam has the smallest current account surplus in Asia at USD200 million, equal to just 0.1 percent of GDP, according to a quarterly research on emerging Asian economies released by ANZ Bank earlier this week.

The report also showed that current account balances have significantly narrowed throughout Asia , reflecting a shift in the global balance of payments. Combined current account surpluses in the region have fallen from USD533 billion in 2007, when they were equivalent to 7 percent of GDP, to just 333 billion last year, or 2.5 percent of GDP.

The report blamed the declining surpluses on increased consumption in countries in the region, as well as rising investments into other countries.

Five countries or territories listed in the report had stable account balances, including Hong Kong , Indonesia , Philippines , the Republic of Korea and Vietnam . Meanwhile, statistics from the Ministry of Industry and Trade showed that Vietnam 's imports last month rose by 5 percent while exports surged 23 percent, reducing the trade deficit to around USD150 million.

However, both imports and exports in the first quarter were down against the previous quarter, and the trade deficit, at  USD275 million, was far below the average of USD2 billion in previous quarters.

ANZ predicted the reduced trade deficit will help Vietnam maintain a more stable foreign exchange rate in the near future. It also forecast that Vietnam will see an economic growth rate of 5.5 to 6 percent this year despite a pace of only 4 percent in the first quarter.

The ANZ report also forecast that the State Bank of Vietnam will maintain the prime rate at 14 percent this month following last month's single-percentage-point reduction. However, ANZ predicted the rate will fall to 10 percent by the first half of 2013.