Positive signs of foreign trade recovery

Positive signs of foreign trade recovery

Trade surplus and major export projects underway signal positive changes for Vietnam’s exports during the final months of the year.

Foreign trade is bouncing back

Trade surplus

The latest data from the General Department of Vietnam Customs show that total value of foreign trade in September 2021 exceeded US$53 billion, with exports reaching more than US$27 billion, down 0.7 percent compared with August (in August, the export value decreased 2.3 percent compared with July); and imports reaching US$26.67 billion, down 2.5 percent (in August, the import value dropped 6.1 percent compared with July).

Notably, in the second half of September, foreign trade value reached US$29.07 billion, up 17.9 percent or US$4.42 billion compared with the first half of the month. Specifically, the export value grew 33.7 percent or US$3.9 billion, reaching nearly US$15.47 billion. These results signal the recovery of foreign trade following a difficult period affected by pandemic prevention and control measures. In the second half of September, Vietnam recorded a trade surplus of US$1.87 billion.

Another bright point in the September export picture was the recovery of Ho Chi Minh City’s export growth with value exceeding US$3.36 billion, up 33 percent or more than US$800 million from August. The city, with its many industrial and export-processing zones, large seaports and the Tan Son Nhat International Airport, is taking trade facilitation measures to help businesses in southern provinces and cities import machinery, equipment and materials for production as well as promote exports.

Regaining growth momentum

At a recent press conference, Deputy Minister of Industry and Trade Do Thang Hai said the Ministry of Industry and Trade is supporting business efforts to take advantage of free trade agreements (FTAs) while at the same time accelerating administrative reforms to facilitate export activities. The government assigned the ministry to increase 2021 annual export value by four to five percent, but the ministry is forecasting a higher growth rate of more than 10 percent.

Some major export projects are underway. For example, LG Display Vietnam, a Republic of Korea-invested project, recently poured an additional US$1.4 billion into its factory in the city of Hai Phong, raising its total investment capital in this locality to US$4.65 billion and making LG Display Vietnam the biggest investment project in Hai Phong. The company will increase plastic OLED display output from 9.6-10 million products to 13-14 million products per month. Its annual export value is expected to grow by about US$6.5 billion, contributing significantly to Vietnam’s export value.

The Ministry of Industry and Trade has forecast that if the Covid-19 pandemic is effectively controlled, businesses in southern localities will be able to regain growth momentum in the last quarter of the year. Therefore, the ministry predicted that Vietnam will achieve a foreign trade balance or even record a surplus in 2021.

VietNam Economic News