Exports are recovering positively.

Việt Nam•22/07/2024

One of the highlights of the Vietnamese economy in the first six months of the year was the positive performance of goods exports, estimated at US$190.08 billion, a 14.5% increase compared to the same period last year. This result was achieved thanks to the government's decisive direction to ministries, sectors, and localities, as well as the determination of businesses to effectively utilize the opportunities presented by Free Trade Agreements (FTAs), while simultaneously affirming the quality of Vietnamese goods in the international market.

Loading and unloading import and export goods at Hai Phong Port. (Photo by DUY LINH)

With existing favorable conditions and the positive growth in export turnover in the first months of the year, the Ministry of Industry and Trade assesses that Vietnam's exports have many opportunities for a good recovery in 2024, although they still face many unpredictable risks in the global market.

Many positive signs

Commenting on the export situation in the first six months of the year, Deputy Director of the Import-Export Department (Ministry of Industry and Trade) Tran Thanh Hai stated that many factors have been and are driving the recovery of import and export activities. Specifically, this is the result of Vietnam's policy of international economic integration and diversification of export markets through negotiations and signing of new-generation FTAs. In addition, the Government has strongly intervened with many comprehensive support solutions for the economy. As the leading agency in managing and directing import and export activities, the Ministry of Industry and Trade has also promptly identified difficulties and risks from export markets to advise and propose appropriate solutions. In particular, Vietnam has recently upgraded its relationship with the United States to a Comprehensive Strategic Partnership, promising sustainable development in trade relations between the two countries. The problem of high inventory levels in various markets is gradually being resolved, especially in key export markets that faced difficulties in 2023, such as the EU and the United States. Specifically for the United States, recovering consumer indicators have become a crucial supporting factor for economic growth.

Bui Huy Son, Director of the Planning and Finance Department (Ministry of Industry and Trade), provided specific figures to further clarify the above assessment. Accordingly, merchandise export turnover in the past six months is estimated at 190.08 billion USD, an increase of 14.5% compared to the same period last year. Of this, the domestic economic sector recovered strongly with export turnover increasing by 20.7% compared to the same period last year, higher than the overall increase by 6.2 percentage points and higher than the increase of the foreign economic sector (12.3%) by 8.4 percentage points.

Trade promotion and export market expansion efforts continued to yield positive results, combining the exploitation of traditional markets with the expansion into new markets (Africa, Eastern Europe, Northern Europe, West Asia). As a result, exports to most major markets and trading partners achieved high growth rates in the first six months of the year.

The United States continues to be our country's largest export market with an estimated turnover of US$54.3 billion, accounting for 28.6% of the country's total export turnover and increasing by 22.1% compared to the same period last year (the same period last year decreased by 22.6%); followed by the Chinese market with an estimated turnover of US$27.8 billion, an increase of 5.3%; the EU market with an estimated turnover of US$24.46 billion, an increase of 14.1%; and South Korea with an estimated turnover of US$12.2 billion, an increase of 10.4%.

Conversely, the structure of goods imports in the first six months of the year also showed positive signs, with 88.8% of total imported goods being essential items, including machinery, equipment, tools, spare parts, and raw materials. Total import value is estimated at $158.2 billion, an increase of 18.1% compared to the same period last year, indicating a good recovery in domestic production, as well as production for export.

Specifically, imports of computers, electronic products and components alone are estimated at $48.8 billion, an increase of 26.7% and accounting for 27.4% of total import value; imports of machinery, equipment, tools and spare parts reached $22.3 billion, an increase of 14.6%.

Thanks to the upward trend in exports, the trade balance for goods continued to maintain a surplus of US$11.63 billion; of which, the domestic economic sector had a trade deficit of US$12.35 billion; and the foreign-invested sector (including crude oil) had a trade surplus of US$23.98 billion.

Flexibility in trade promotion activities

According to Vu Ba Phu, Director of the Trade Promotion Department (Ministry of Industry and Trade), trade promotion activities have brought many practical benefits to the export operations of businesses in the first six months of the year.

Specifically, trade promotion activities have focused on strengthening the exploitation of FTAs to diversify markets and supply chains and boost exports; promoting investment to attract foreign capital into the processing and manufacturing sectors to improve the quality of domestically produced products and meet world market standards; and coordinating with the system of Vietnamese trade offices abroad to advise and provide market information to localities and businesses.

Since the beginning of the year, six trade promotion meetings with the system of Vietnamese Trade Offices abroad have been held, focusing on general or in-depth topics according to market groups and export product categories.

The proactive participation of localities, industry associations, and numerous businesses has made these conferences an effective bridge for information exchange, strengthening coordination between domestic units and the Vietnamese Trade Offices abroad, promptly resolving difficulties and obstacles in import and export activities, aiming to maximize new opportunities from markets, and promoting sustainable export development as well as efficient import.

However, many of Vietnam's export markets will continue to increase new requirements for international trade, establishing denser barriers, increasing trade protectionism, green transitions, focusing on health-related products, and requirements for energy transition and sustainable development, etc.

The changing global and regional situation brings both advantages and opportunities, as well as intertwined difficulties and challenges, posing many new demands on trade promotion. Therefore, trade promotion activities in the coming period will have to be more flexible, combining traditional trade promotion with modern innovative methods, linked to e-commerce and the digital economy; strengthening communication and promotion, and enhancing the competitiveness of Vietnamese products and brands.

"On the other hand, we also need to continue promoting awareness among the business community about green transformation and sustainable production to support businesses in enhancing their competitiveness and adapting to current market trends," Mr. Vu Ba Phu shared.

Deputy Director Tran Thanh Hai also emphasized that the global economy in 2024 still faces many unpredictable risks. The fight against inflation remains fraught with uncertainties, especially due to the monetary policies of major countries. Furthermore, the current issue of excess capacity in China is increasing competitive pressure in the market. When consumer demand declines, China's surplus of cheap goods could affect the ability of other countries to boost exports.

Therefore, to maintain the growth momentum of exports in the remaining months of the year, units of the Ministry of Industry and Trade are reviewing key products and markets that need to be prioritized for trade promotion in the short, medium, and long term; coordinating closely to jointly implement a series of specialized activities from many units within the framework of a trade promotion program, thereby improving efficiency and saving resources in the context of limited state budget funds.

In addition, closer coordination is needed in guiding localities, industry associations, and businesses in proposing and developing plans for trade promotion activities, developing domestic and export/import markets, and digital transformation in trade promotion, in accordance with strategies and projects approved by the Prime Minister.

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