Recovery maintained within trade activities

A high trade deficit has reflected strong performance in domestic production so far this year, amid growing need for imported materials for the economy.

- Thanh Dat

The National Statistics Office (NSO) last week reported that in April alone, total trade value of Vietnam reached $94.32 billion, up 26.7 per cent compared to the same period last year. Exports and imports touched over $45.5 billion and $48.8 billion, up 21 and 3.6 per cent, respectively. Total trade deficit came in at $3.3 billion.

In the first four months of last year, Vietnam reaped a trade surplus of $3.8 billion. However, in the same period this year, the economy recorded a trade deficit of $7.11 billion. Total import-export turnover is estimated at nearly $344.2 billion, up 24.2 per cent on-year, showing continued recovery and expansion in trade activities.

For the four-month period, exports reached more than $168.5 billion, up nearly 20 per cent, with foreign-invested enterprises (FIEs) continuing to account for the lion’s share of 80 per cent, at $134.9 billion, up 25.8 per cent on-year. Vietnamese business earned $33.65 billion, representing an on-year slight rise of 0.4 per cent.

Regarding imports, Vietnam recorded more than $175.6 billion, up nearly 29 per cent on-year, mainly driven by production inputs for the economy. Vietnamese enterprises spent nearly $49.3 billion, up 20.4 per cent, and FIEs spent nearly $126.4 billion, up 32.3 per cent.

According to the NSO, though there may be concern over a high trade deficit, it reflects stronger domestic production as Vietnam remains attractive for foreign investors who have to import assorted materials for production from elsewhere.

When it comes to the composition of imports, production materials were estimated at nearly $165.4 billion so far this year, accounting for 94.2 per cent of the total. Of this, machinery, equipment, tools, and spare parts were responsible for 54.8 per cent, while raw materials, fuels, and other production inputs made up 39.4 per cent. Consumer goods were estimated at $10.27 billion, accounting for only 5.8 per cent.

Tilting the balance