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Trade balance will be maintained by end-2021

Summary

Updated on : 19-12-2021

Vietnam’s imports and exports show benefits when effectively implementing FTAs. Photo: Huy Kham.

The trade value in September showed a month-on-month decrease of 0.8% and year-on-year of 0.6% to US$27 billion. However, the trade between January and September rose by 18.8% to US$240.5 billion compared to the same period of the previous year, the Ministry of Industry and Trade reported on September 30.

The ministry’s report also showed that the trade balance in September saw a surplus of US$500 million. The trade balance has a trade deficit of US$2.13 billion in January-September.

According to the Ministry of Industry and Trade, the trade deficit in January-September results from the global economy recovery, growing demand and the increase in raw material imports for production. The global goods price rose so the price of input raw materials for production went up, contributing to soaring trade.

The increase in sea freight rate has escalated costs and imports but the exports dropped since June.

In June, enterprises in Bac Giang and Bac Ninh have been affected by the COVID-19 pandemic, and those in southern provinces and cities have been seriously hit by the public health crisis in July, August and September.

Vietnam’s imports and exports have reaped benefits when effectively implementing FTAs and the increased demand in the end of the year, especially major goods groups, the Deputy Minister of Industry and Trade said.

However, the operation of enterprises still suffers from difficulties, transportation and logistics have not resumed due to the turbulence of the Covid-19 pandemic in HCM City and southern provinces.

Businesses must meet strict requirements on pandemic prevention and control such as the “three on-the-spot” and “one route, two destinations” models. They have also faced a risk of shortage of workers after the pandemic is under control, especially experienced workers.

The customs clearance for exports to Chinese such as agricultural and fishery products have suffered from obstacles when China strengthened disease control measures at northern border gates.

Vietnam had a trade deficit of US$2.13 billion between January and September. This figure is equal to 0.8% of export turnover which is not a big gap, Deputy Director of Import and Export Duty Department Tran Thanh Hai said.

“Meanwhile, there are still three remaining months of the year. If the pandemic is effectively under control, enterprises in the southern provinces restore their growth, the country’s trade balance may be maintained and see a low trade surplus,” the Deputy Director said.

The Ministry of Industry and Trade will focus on solutions to improve and expand the export markets and make use of advantages from FTAs, and instruct businesses to invest in small and niche markets to prevent the decline of exports.

In the past nine months, the group of processed industrial products continued to play an important role, contributing to the overall export growth of the country when accounting for 86.27% of the total export turnover. The export turnover of this group of goods saw a year-on-year increase of 20.8% to US$207.5 billion.

In these months, the US was Vietnam’s largest export market with export turnover of US$69.8 billion, up 27.5%, followed by China at US$38.5 billion, the EU at 28.8%, and the ASEAN market at 20.6%, respectively.