June 16, 2019 06:44

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The trade deficit has returned

10:19 | 16/03/2019

VCN- After a big win with an impressive trade surplus of 2018 and a slight trade surplus in the first month of 2019, entering the second month of 2019, trade deficit has returned.

the trade deficit has returned Imports and exports flourishes in the first month of the year
the trade deficit has returned Vietnam racks up US$1.3 billion trade deficit by mid-February
the trade deficit has returned Vietnam faces threat of trade deficit in 2019
the trade deficit has returned
Innovating trade promotion, making good use of FTAs are the feasible solutions to promote export of goods. Photo: T. Binh.

Trade deficit with US$ 84 million

According to the report of General Statistics Office (Ministry of Planning and Investment): Generally for the first 2 months of the year, the export turnover was estimated at US$ 36.68 billion, up 5.9% over the same period in 2018. Meanwhile, the domestic economic sector reached 10.72 US$ billion, up 9.9%; foreign invested sector (including crude oil) reached US$ 25.96 billion, up 4.3%. Some key items that contributed to export in the first 2 months were mainly: Phones and components (US$ 6.8 billion, down 7.3%); textiles and garments (US$ 4.9 billion, up 19%); electronics, computers and components (US$ 4.2 billion, up 1.9%); footwear (2.7 US$ billion, up 18.4%)... For the market, in the past 2 months, the United States was the largest export market of Vietnam with a turnover of US$ 8.1 billion; next was the EU market with US$ 6.3 billion; ASEAN market reached US$ 3.8 billion; South Korea reached US$ 3.1 billion...

For the import, the report of the General Statistics Office stated that in the first 2 months of the year, the total value was estimated at US$ 36.76 billion, up 7.5% over the same period last year. In which, the domestic economic sector reached US$ 15.29 billion, up 11%; foreign invested sector reached US$ 21.47 billion, up 5.1%. China was still Vietnam’s largest import market with a turnover of US$ 10.7 billion, an increase of 17% compared to the same period in 2018. The remarkable point of import and export was that while Vietnam still maintained the momentum of trade surplus with US$ 816 million in January, the trade deficit was US$ 900 million in February. Therefore, in the first 2 months, Vietnam has a slight trade deficit of US$ 84 million.

According to the Ministry of Industry and Trade: In February, the import and export turnover of Vietnam fell sharply compared to January due to the impact of the Lunar New Year holiday. However, looking at the overall 2-month results, the Ministry still assessed that Vietnam's commercial activity maintained a positive growth rate over the same period in 2018.

Around the story of import and export of goods, especially the return of trade surplus, the expert Le Quoc Phuong - former Deputy Director of the Information Center for Industry and Trade (Ministry of Industry and Trade) analyzed: From 2012 to present, except for the trade deficit in 2015, Vietnam had a trade surplus. Especially, from 2016 to the end of 2018, Vietnam had a big trade surplus, and the following year was higher than the previous year. However, Vietnam is a developing economy so the return of trade deficit is not impossible.

Being able to control trade deficit below 3%

In order to promote the export of goods, in February as well as throughout March, the Ministry of Industry and Trade is organizing actively the dissemination and guiding for the enterprises to identify opportunities and challenges of the Comprehensive Partnership and Trans-Pacific Progress Agreement. (CPTPP) and other bilateral Free Trade Agreements (FTAs), in order to make the best use of opportunities from integration. In addition, the Ministry of Industry and Trade also advocated promoting and innovating the trade promotion stages. Typical examples such as: recently, the Trade Promotion Bureau (Ministry of Industry and Trade) announced the cooperation plan to bring the Vietnamese enterprises to the foundation of Amazon “e-commerce giant” through Amazon Global Selling; continued solutions to bring Vietnamese goods into the foreign distribution channels such as AEON with the goal of exporting US$ 500 million by 2020 and US$ 1 billion by 2025.

According to the Minister of Industry and Trade Tran Tuan Anh: it was forecasted that there would be many difficulties and fluctuations in the world economy in general in 2019, which affect the export and import activities of Vietnam. The National Assembly still assigns the Government, the Ministry of Industry and Trade strives to increase the total export turnover by 7-8% compared to 2018; trade deficit rate compared to total export turnover would be less than 3%. In the direction and administration, the Ministry of Industry and Trade will implement many measures and solutions to organize well the export and import activities to achieve and exceed this target.

the trade deficit has returned In early 2019, Vietnam sees a trade deficit of nearly US$ 1 billion

VCN – In the first 15 days of January 2019, export turnover was lower than the same ...

Dr. Le Quoc Phuong commented: In this year, the target set by the National Assembly on the export growth as well as controlling trade deficit below 3% would be very feasible. “The most important point is that the export competitiveness of both the FDI and the domestic enterprises is relatively better than the previous one. Another point is that the Government has continued to have a strong solution to create favorable conditions for the enterprises. In addition, Vietnam has signed a series of FTAs. If the Vietnamese enterprises take advantage of it, it will be very convenient for export,” Mr. Le Quoc Phuong said.

Deepening the content of utilizing the FTAs to promote the exports, Minister Tran Tuan Anh stated the viewpoint, that from a business perspective, the enterprises also needed to improve actively their competitiveness and productivity through expanding the production scale, and technology investment to improve the product quality and reduce the product costs. In particular, investing in the technology development would be one of the important keys to help the enterprises increase productivity and improve competitiveness in the market. In addition, the Vietnamese enterprises need to have a long-term strategy of branding products and enterprises to enhance the effective participation in the global value chains.

By Thanh Nguyen/ Binh Minh