Consecutive trade deficit, still confident of trade surplus

VCN – In the first six months of 2021, Vietnam had a trade deficit of US$1.47 billion, raising concerns that if the situation is not controlled, it may have negative impacts on the economy. However, considering all factors, it is forecast that Vietnam will see a trade surplus of US$2 billion for the whole year.
Vietnam records 1.35 billion USD trade deficit in first half of June Vietnam records 1.35 billion USD trade deficit in first half of June
FDI businesses dominate exports: Old problem, not easy to solve FDI businesses dominate exports: Old problem, not easy to solve
Exports decrease due to complex pandemic, Vietnam suffers trade deficit again Exports decrease due to complex pandemic, Vietnam suffers trade deficit again
Textiles and garments, leather and footwear are forecasted to have many opportunities for export in the second half of the year. Photo: N.Thanh
Textiles and garments, leather and footwear are forecasted to have many opportunities for export in the second half of the year. Photo: N.Thanh

Fear of increase in imported consumer goods

After many years of consecutive trade surplus, Vietnam recorded a trade deficit in the first months of 2021.

Mr. Nguyen Viet Phong, Director of the D Trade and Service Statistics Department; (General Statistics Office, Ministry of Planning and Investment), said Vietnam had a trade deficit of US$460 million in February, 2021; US$1.2 billion in April 2021; US$2.1billion in May and US$1 billion in June.

In general, in the first six months of 2021, Vietnam had a trade deficit of US$1.47 billion. Of which, the domestic economic sector saw a trade deficit of US$15.01 billion; FDI sector saw a trade surplus of US$13.54 billion.

In first six months of 2021, export turnover is estimated at US$157.63 billion, up 28.4% year-on-year; import turnover was estimated at US$159.1 billion, up 36.1% year-on-year. The trade balance of goods saw a trade deficit of US$1.47 billion.

Regarding the structure of imported goods in the first half of the year, the group of production materials was estimated at US$149.32 billion, up 36.7%year-on-year. Of which, the group of machinery, equipment, tools and spare parts reached US$72 billion, up 33%; group of raw materials, fuel and materials reached US$77.35 billion, up 40.2%; and the group of consumer goods was estimated at US$9.78 billion, up 28% year-on-year.

Mr. Phong is afraid that “In the first half of the year, Vietnam spent US$1.8 billion to import CBU cars, the increase in import of consumer goods will reduce the competitiveness of domestic goods. At the same time, import prices of goods for production were also higher than those in the same period last year. Specifically, import price of computers, electronic products and components rose by 1.62%; machinery, equipment, tools and spare parts rose by 0.56%; fabric rose by 1.65%; iron and steel rose by 7.65%. If the trade deficit is not controlled, especially the trade deficit of consumer goods, it will cause negative impacts on the economy such as wasting foreign currency or affecting domestic production,” said Phong.

Speaking to a reporter of Customs News about the return of the trade deficit in the first half of this year, Dr. Le Quoc Phuong, former deputy director of the Industry and Trade Information Center (Ministry of Industry and Trade), said Vietnam's trade deficit is still low.

So far, Vietnam is a developing country, so the demand for imports is very large. Vietnam's economy is still mainly processing and assembling, so it has to import many spare parts and materials. Therefore, imports higher than exports are not a big problem. “Notably, when looking at the structure of imported goods, we can see that Vietnam mainly imports production materials. Imports of consumer goods also increased but accounted for a relatively small proportion of total import turnover in general," said Le Quoc Phuong.

Vietnam forecast to see a trade surplus of US$2 billion

According to the latest analysis of the Ministry of Industry and Trade, Vietnam's imports and exports will still have some primary favorable factors, especially for ten-billion-dollar export commodities.

For example, countries are vigorously implementing vaccination along with the easing of social distancing measures, leading to increased demand for Vietnam's textile, footwear, and wooden products. Along with that, some economies continue to deploy stimulus packages through direct support to people, thereby promoting consumption, including goods imported from Vietnam.

However, Vietnam's exports also face many difficulties when protectionism is returning. Specifically, the number of trade remedy cases against Vietnam's export goods has tended to increase.

Mr. Le Quoc Phuong also mentioned the sharp increase in international freight by sea from the fourth quarter of 2020 until now. Specifically, freight of Asian routes rose 3-4 times, African routes rose 3-4 times, European routes rose 5-6 times, even 7-8 times. Meanwhile, the shortage of containers is still a problem.

In case the factors are at the current level or more favorable, the total export turnover of this year is forecasted by the Ministry of Industry and Trade to reach about US$308 billion, up 9% compared to 2020.

Regarding imports, based on the progress in the first months of the year, the import turnover is likely to reach about US$306 billion, up 16.5% compared to 2020. The trade surplus will be about US$2 billion.

Regarding how to promote Vietnam's export of goods in more a sustainable manner, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), said the most important thing is that exports must be associated with macro-economic stability and maintain a stable trade balance.

The Ministry of Industry and Trade has worked with ministries and agencies to plan production and export in the direction of reducing low-value-added products and focusing on high-value-added products; reviewing legal documents, removing difficulties and creating maximum facilitation for commercial activities.

Along with export development, it is said that Vietnam must also control imports well through issues such as rules of origin, combating evasive measures and developing supporting industries to replace imported goods.

“In conclusion, on such foundations, the Ministry of Industry and Trade is developing the Merchandise Import-Export Strategy for the 2021-2030 period, which will be submitted to the Government for consideration and promulgation in the near future. The views and orientations on sustainable export will be clearly expressed in this document," said Mr. Tran Thanh Hai.

By Thanh Nguyen/ Huyen Trang

Related News

Latest News

VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.

More News

Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Shrimp exports surge in 10 months, generating 3.2 billion USD

Shrimp exports surge in 10 months, generating 3.2 billion USD

Vietnam’s shrimp exports in October reached US$394 million, a strong 24% increase year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s exports to the U.S. near US$100 billion milestone

Vietnam’s exports to the U.S. near US$100 billion milestone

VCN - By the end of October, Vietnam's exports to the United States approached US$100 billion, reaffirming its position as Vietnam's largest export market.
From the “abnormal” coffee price, worries about the new crop

From the “abnormal” coffee price, worries about the new crop

VCN - The Vietnamese coffee industry enters the new crop with the question of what is a reasonable price to ensure benefits for coffee growers while still retaining international consumers.
What obstacles limit the market share of Vietnamese goods in the UK?

What obstacles limit the market share of Vietnamese goods in the UK?

VCN - Vietnamese goods account for only about 1% of total imports into the UK market. One of the reasons is that they have not yet built their own brands and have not focused on effective strategies and approaches to market information.
Why seafood exports to some Middle Eastern Countries are stalled

Why seafood exports to some Middle Eastern Countries are stalled

VCN - Several shipments of seafood exported to certain Middle Eastern countries have been delayed due to legal challenges related to consular legalization procedures. This has created significant bottlenecks in accessing these markets.
Storm No. 3 destroys profits of many insurance companies

Storm No. 3 destroys profits of many insurance companies

VCN - Due to the impact of storm No. 3, the business results of the third quarter and the first 9 months of 2024 of the insurance sector have been significantly affected. This requires more efforts from businesses for the results of the whole year 2024.
Vietnam, Malaysia eye golden partnership opportunities in Halal industry

Vietnam, Malaysia eye golden partnership opportunities in Halal industry

Cooperation in the Halal industry can help Vietnamese products reach nearly 2 billion Muslim consumers worldwide, representing over 24% of the global population, according to Malaysia’s Minister of Investment, Trade, and Industry Zafrul Abdul Aziz.
Tra fish sector aiming for production, processing greening for sustainable development

Tra fish sector aiming for production, processing greening for sustainable development

Greening production and processing to meet export requirements is both a trend and a necessity for many industries, including the tra fish sector.
Read More

Your care

Latest Most read
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - Mr. Nguyen Hoai Nam, Deputy General Secretary, Vietnam Association of Seafood Exporters and Producers (VASEP), said that the advantage that UKVFTA brings is that the main products of the seafood industry enjoy 0% import tax to the UK, especially key
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN - E-commerce platforms have emerged as crucial distribution channels, enabling goods to reach consumers quickly and conveniently.
Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Mobile Version