Vietnam runs US$3.91 billion trade deficit in first half of February
The nation recorded a trade deficit of US$3.91 billion during the initial 15 days of February amid falling exports, according to the General Department of Customs.
The first half of February saw the country export a total of US$8.75 billion worth of goods, while its imports hit US$12.66 billion, therefore bringing the nation’s total trade value since the beginning of the year up to US$81.68 billion.
During the reviewed period, the country also reported a trade deficit of over US$2.5 billion.
However, economists have stated that the trade deficit is not a concerning figure, mainly due to February being the time the Lunar New Year holiday fell on.
The country's largest holiday lasted up to nine days, resulting in the number of exported goods decreasing. From the beginning of this year to mid-June, two groups of imported goods witnessed a turnover of billions of US$. They include computers, electronic products and components; along with machinery, equipment and spare parts. In the opening months of the year, enterprises often bolstered their imports of input materials and spare parts as a means of meeting their production and export demands for later months.
According to details given by the Ministry of Industry and Trade (MoIT), this year will see Vietnamese exports continue to face difficulties and challenges, with the biggest ones being the prolonged impact of the COVID-19 pandemic. Indeed, this might result in several complicated and unpredictable developments which impact global production and trade, including in Vietnam.
Other difficulties could potentially include skyrocketing freight rates and high container rental costs, along with a shortage of containers that would continue to impact export prices and reduce the general competitiveness of Vietnamese exported goods. Furthermore, the increasing trend of non-tariff trade protection barriers in many major market areas, the volatility of global commodity prices which has become unpredictable, the risk of inflation, and currency appreciation could also affect exports.
The MoIT noted that in 2021, Vietnamese import and export turnover hit a record of nearly US$670 billion, of which exports made a spectacular breakthrough with an increase of over 19%. This represented a bright spot for the economy in the context of the damaging impact of the pandemic.
Last year saw the country record 35 items with an export turnover of US$1 billion, an increase of one item compared to 2020. Of these, eight items had an export turnover of over US$10 billion. Although accounting for less than 10% of the export value of the entire economy, agriculture was the sector that brought a "new impetus" to export growth in 2021.
These results can be attributed to the strong exploitation of foreign markets, which brought Vietnamese goods deeper into the global production and supply chain. Vietnamese businesses also utilised opportunities from free trade agreements, especially new-generation agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA) and the Vietnam - UK Free Trade Agreement (UKVFTA).