Domestic production leads trade to good standing

Domestic production leads trade to good standing

The General Statistics Office (GSO) last week announced that Vietnam’s exports and imports have been flourishing, with an expectation of a breakthrough figure in turnover of $800 billion in 2024. This will be far higher than the $681 billion recorded last year, and will also exceed the targets of as much as $790 billion for this year. “The eight-month goods exports landscape with many positive signals is creating strong motivation for businesses, associations, and industries to continue to follow market developments closely and boost exports,” the GSO said.

“The total import-export turnover in the last two months has exceeded $70 billion, with nearly $38 billion in August alone. If the current growth momentum is maintained, this year’s import-export will set a record, far surpassing the $732 billion mark achieved in 2022. And we will be entirely able to expect to reach a record figure of $800 billion.”

According to an expert from the Central Institute for Economic Management, based on the export and import results and favourable and difficult factors of the global market, it is feasible for Vietnam to expect a total export and import turnover of $800 billion in 2024, creating momentum for exports and imports in 2025.

The expert calculated that to achieve total export turnover of $800 billion, the export growth rate in 2024 compared to 2023 needs to reach at least 17.5 per cent, with a total export and import turnover of the last four months of 2024 being $290 billion, an average of $72.5 billion per month.

In August, the total goods export and import turnover is estimated to have hit $70.65 billion, up 13.5 per cent compared to the same period last year. In the first eight months of this year, the figure is estimated to have hit nearly $511.1 billion, up 16.7 per cent on-year - in which the export and import turnover came at $265.1 billion and $246.02 billion, up 16.7 and 17.7 per cent, respectively.

The GSO attributed the eight-month export turnover rise to recovery in Vietnam’s key export markets, including China ($37.9 billion – up 2.8 per cent), the United States ($77.9 billion – up 9.8 per cent), ASEAN (24.5 billion – up 11.9 per cent), South Korea ($16.9 billion – up 8.3 per cent), the EU ($34.4 billion – up 18.5 per cent), and Japan ($16.1 billion – up 5.6 per cent).

Notably, the export turnover of goods in recent months has continuously reached high levels, coming at $33.7 billion in June, $36.24 billion in July, and 37.59 billion in August. On average in the first eight months of 2024, the figure hit an average of $33.1 billion a month, while the average export turnover in the last six months of 2023 only touched $31.7 billion a month.

Vietnam’s exports largely depend on imports because the country’s supporting industries remains feeble, with the majority of input materials having to be imported.

According to the GSO, exports increasing strongly reflect the fact that domestic production is gaining momentum. A closer look at the import structure will reveal the quality of imports which are used for domestic production. In the first eight months of 2024, the group of production materials reached $230.95 billion, accounting for 93.9 per cent.

“Vietnam’s import and export activities since early this year are bouncing back thanks to ongoing recovery in domestic production and global demands,” the Ministry of Industry and Trade (MoIT) said. “High import rates are reflecting enterprises in general are performing positively in the context that the majority of input materials have to be imported.”

In the first eight months of this year, the index of industrial production is estimated to have increased 8.6 per cent as compared to the same last year. Particularly, revenues from goods export and import activities are estimated to have reached $7.44 billion - up 16.2 per cent on-year.

According to the MoIT, in addition to an optimistic goods exports landscape expected, the economy has also been witnessing a big trade surplus, reflecting its solid foundation. Specifically, after a $1 billion in trade surplus in May, the trade balance bounced back with a trade surplus recording $2.94 billion in June, $2.36 billion in July, and $4.53 billion in August, and the trend is expected to continue until the year’s end.

The domestic economy has witnessed a rise in trade surplus from $8.01 billion in the first five months of the year, $11.63 billion in the first half of 2024, $14.54 billion in seven months, and $19.07 billion in eight months when Vietnamese businesses saw $15.7 billion and foreign-invested enterprises enjoyed $34.77 billion including crude oil exports.

The government last week demanded that to continue promoting trade, it is necessary to continue to closely monitor the developments and import-export policies, and grasp the green trends in industries as well as new regulations on supply chain assessment of the EU for export industries to promptly inform associations and businesses.

“Although the export market is recovering, exports of key industries are facing challenges due to labour shortages, high production costs, strict requirements, and trade defence measures of export markets,” said Phan Thi Thang, Deputy Minister of Industry and Trade.

Domestic production illustrates resilience Domestic industrial production has continued its recovery trend, reflecting the government’s pro-business policies proving productive and its efforts to generate more employment.