Vietnam trade deficit hits over US$3.7 billion in Jan-Aug

Aug 30, 2021 / 02:10 PM

Vietnam’s trade outlook for the remainder of the year is projected to have intertwined challenges and opportunities, with the country’s efforts to contain the pandemic the most important factor.

Vietnam posted a trade deficit of US$1.3 billion in August, marking the fourth consecutive month the country has had an unfavorable trade balance, according to the General Department of Vietnam Customs (GDVC).

Cargo handling at Haiphong Port. Photo: Cong Hung

This resulted in an accumulated deficit of US$3.71 billion during the first eight months of 2021.

The serious Covid-19 situation in Vietnam and subsequent restriction measures have hampered trading activities across the country. In August, exports declined by 6% month-on-month to US$26.2 billion, while imports reached US$27.5 billion, down 5.5%.

Overall, the country’s export turnover rose by 21.2% year-on-year to nearly US$212.55 billion in the eight-month period.

Foreign-invested companies recorded a trade value of US$156.86 billion during the period, up 25.5% year-on-year, accounting for 73.8% of Vietnam’s export turnover, while the domestic-invested sector recorded a turnover of US$55.69 billion, up 10.5%, or 26.2% of Vietnam’s total trade volume.

Phones and parts recorded the highest trade turnover with $35.7 billion, or 16.8% of the total and up 13% year-on-year; followed by electronics, computers, and parts with $31.3 billion, up 12.8%; machinery and equipment ($23 billion, up 50%); garment ($21.2 billion, up 9.7%); footwear ($12.6 billion, up 16.2%).

For the eight-month period, the US continued to be Vietnam’s largest export market worth $62.2 billion, while China ($32.7 billion) and the EU ($26.1 billion) claimed the other two spots in the top three.

Vietnam’s trade outlook for the remainder of the year is projected to have intertwined, with the country’s efforts to contain the pandemic the most important factor.

The fact that a large number of enterprises were forced to suspend or temporarily scale down operations could potentially disrupt the supply chains. However, more Vietnamese firms have now been able to utilize preferential treatments from free trade agreements (FTAs) that Vietnam is a part of, including the CPTPP, EVFTA, or UKFTA.

The pandemic also posed negative impacts on the total revenue of retail sales and services with a decline of 33.7% year-on-year in August to VND280 trillion ($12.33 billion). For the January-August period, the number saw a decrease of 4.7% year-on-year to VND3,044 trillion ($134.11 billion).

During the January-August period, Hanoi posted an export turnover of $9.78 billion, down 5.2% year-on-year, of which computers and electronics made up a lion’s share of $1.24 billion; followed by farm produce ($516 million), and petroleum products ($417 million).

On the contrary, the city imported goods worth $22.5 billion, a surge of 21.8% year on year. Machinery, equipment, and parts were the main import items with $4.27 billion, up 27.4%. Transportation vehicles took the second spot with $1.76 billion; computers and electronics stayed at third with $1.6 billion.