Deficit up but production resilient

A continued high trade deficit this year thus far has mirrored a sturdy performance in domestic production, marked by a rise in foreign funding in manufacturing. Khoi Nguyen reports.

- Khoi Nguyen

The National Statistics Office (NSO) last week reported that in May alone, total trade value of Vietnam reached $146 billion, up 26.7 per cent compared to the same period last year.

Export and import turnover touched over $46.93 billion and $52.14 billion, up 18 and 33.8 per cent, respectively.

The total trade deficit came in at $5.21 billion, up from $3.3 billion in April and $670 million in March.

The trade deficit sat at $3.64 billion in the first quarter and $13.8 billion over the first five months, a contrast to a trade surplus of $4.67 billion in the corresponding period last year.

In the first five months of this year, total import-export turnover is estimated to have come in at $455.1 billion, up 25 per cent on-year, demonstrating continued recovery and expansion in trade activities.

Exports reached nearly $215.7 billion, up 19.5 per cent, with Vietnamese enterprises fetching $43.5 billion, representing an on-year slight rise of 2.5 per cent and accounting for 20 per cent of the economy’s total export turnover. Meanwhile, foreign-invested enterprises (FIEs) continued to take up the lion’s share of 79.8 per cent, at $172.16 billion, up 24.7 per cent as compared to the same period last year.

When it comes to imports, Vietnam recorded more than $229.46 billion, up 30.8 per cent on-year, mainly driven by production inputs for the economy. Vietnamese enterprises spent nearly $64.3 billion, up 22.7 per cent, and FIEs spent nearly $165.2 billion, up 34.3 per cent.

The NSO reiterated that though there may be some concern over a high trade deficit over the past months, domestic production in Vietnam remains resilient against global headwinds causing supply chains disruptions.