Vietnam’s Exports Rebound in Jan-July

With solidly high growth in recent months, Vietnam’s export turnover is likely to reach the target sooner than expected while trade deficit is kept at approximately 20 percent of export earnings. Shipments of industrial goods are forecast to increase on higher global demand in the wake of economic recovery and on continued effect of export-boosting measures.

Accelerating export

The Ministry of Industry and Trade said Vietnam earned US$5.8 billion from exports in July, up 20.7 percent year on year but down 8 percent month on month. The country’s import turnover in July was US$6.95 billion, a 9 percent rise from a year earlier.

The export value of the first seven months of the year hit US$38.3 billion, a year-on-year increase of 17.5 percent thanks to robust increases in previous months. In particular, the strong rise was seen in processed industrials like chemicals (up 258 percent year on year to reach US$147 million), iron and steel (up 224 percent to US$573 million), vehicles and parts (up 101 percent to US$923 million), rubber products (up 87 percent to US$147 million), electric wire and cable (up 79.5 percent to US$708 million), machinery, equipment, tools and accessories (up 62.8 percent to US$1.6 billion), etc.

Among key exports, garments and textiles raked in US$5.8 billion in the seven-month period, up 17 percent over the same period of 2009.

Mr Le Quoc An, Chairman of the Vietnam Textile and Apparel Association (VITAS), said shipments to most markets significantly grew up in the seven-period like the United States (up 23 percent year on year), Japan (15 percent), Europe (1.5 percent) and ASEAN countries (30 percent). Specially, export earnings to South Korea surged 80 percent year on year on tax reductions in accordance with the ASEAN – South Korea Agreement.

The exportation of electronics, computers and parts will continue to expand as several large foreign-invested projects will start operations in the coming months.

Turnover of rice, aquatic and wood products reached US$7.918 billion, up 10.4 percent. High leapers include rubber (up 85 percent on the back of higher export prices), pepper (41 percent), cashew nuts (25 percent), aquatic products (11 percent) and tea (10.3 percent).

To promote export in the last months of the year, the Ministry of Industry and Trade continues to request the State Bank of Vietnam to direct commercial banks to take measures to widen credit access for businesses, especially exporters.

Regarding electricity, under the direction of the Prime Minister, the ministry instructed the Electricity of Vietnam (EVN) to focus its resources and capacity to ensure electricity supply for production and living activities.

At the same time, the ministry also guided the Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam National Coal – Mineral Industries Group (Vinacomin), State-owned economic groups, corporations and enterprises to coordinate with the Electricity of Vietnam to solve difficulties and stabilise power supply.

The Vietnam Trade Promotion Agency (Vietrade) and the Vietnam Competition Authority also enhanced cooperation to promote trade, joined trade negotiations and discussed abolition of barriers to facilitate the approachability of Vietnamese goods to new markets and deepen the penetration into traditional markets. The European Union (EU) has recently lifted antidumping duty on Vietnamese bicycles, effective from July 15.

Easing trade deficit

Also in seven months, the country imported US$45.7 billion worth of goods and services, a year on year increase of 25.5 percent. The domestic economic sector brought in US$29.26 billion, up 13.6 percent, while the foreign-led economic sector made US$19.45 billion, up 46.4 percent.

The July trade deficit was estimated at US$1.15 billion, equal to 19.8 percent of export turnover, bringing the seven-month gap to US$7.44 billion, equal to 19.45 percent of exports.

According to the Ministry of Industry and Trade, trade deficit has been maintained at the expected range of at most 20 percent of export earnings set by the National Assembly – the highest legislative body. However, Vietnam needs to take drastic measures to boost exports, adjust import and export tariff rates on aquatic products and timbers.

To curb the trade gap, the Ministry of Industry and Trade and the Ministry of Industry and Trade are considering tax rates to encourage Vietnamese people to give priority to using made-in-Vietnam goods. – VCCI

Tags: Vietnam exports, Vietnam trade