Export dents expected to continue in second half

June 07, 2023 | 08:00
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Despite an uptick in May, Vietnam’s five-month export turnover has witnessed a large annual drop, reflecting difficulties in local production and global demands

The General Statistics Office (GSO) last week reported that Vietnam’s export turnover has gradually revived since early this year, thanks to strong trade promotion activities.

The value is estimated to come at $29.05 billion for May, higher than $27.86 billion recorded in April, but still lower than the $29.71 billion in March. The figure hit $25.88 billion in February, after standing at $23.61 billion in January.

Export dents expected to continue in second half

In May, the export turnover of Vietnamese enterprises sat at $7.79 billion, up 1 per cent on-month while that of foreign-invested enterprises (FIEs), including crude oil exports, came at $21.26 billion, up 5.5 per cent on-month. “However, as compared to the same period last year, Vietnam’s total export turnover in May decreased 5.9 per cent. In which Vietnamese enterprises’ reduced 5.9 per cent, and FIEs’, including those in crude oil, went down by 5.8 per cent,” the GSO said.

For the first five months of this year, the economy raked in an estimated $136.17 billion in exports, down 11.6 per cent compared to the corresponding period last year. In which Vietnamese enterprises’ turnover hit nearly $35.2 billion or an on-year reduction of 5.9 per cent, and FIEs turnover including crude oil export value sat at nearly 101 billion, an 11.1 per cent on-year decline.

Mobile phones and their spare parts saw a five-month export turnover of $21.178 billion, down 16 per cent on-year.

Meanwhile, electronics, computers, and their spare parts – which are largely produced by many FIEs such as Samsung, LG, Jing Gong, Daewoo Vietnam, Genesistek Vina, and FC Vietnam, have hit a total five-month export turnover of $20.33 billion – down 9.8 per cent as compared to that in the same period last year.

From an initial investment of $670 million in the northern province of Bac Ninh, Samsung has invested $20 billion in Vietnam. That said, the figure will continue to grow. During a visit to Vietnam in 2022, Roh Tae-Moon, president and head of Samsung Electronics’ Mobile Experience Division, said that Samsung would invest an additional $3.3 billion in Vietnam.

Between 2018 and 2022, Samsung contributed over $306 billion in export turnover to Vietnam. In particular, in 2022 alone, the achieved figure is still up to $65 billion, making an important contribution to bringing Vietnam’s total export turnover to surpass $700 billion for the first time, reaching more than $732 billion.

According to the GSO in the first five months of this year, Vietnam has seen 23 export items with an export turnover of more than $111 billion, accounting for 87 per cent of the country’s total export turnover.

There have also been seven export items with an export value of over $5 billion, or 65.4 per cent of the total value. They include mobile phones and their spare parts at $21.17 billion); electronics, computers, and their spare parts at $20.33 billion; machinery and equipment $16.55 billion; garments and textiles $12.32 billion; footwear $8.18 billion; transport means and their spare parts $5.43 billion; and wood and wooden products $5 billion.

Vietnam’s total export-import turnover in the first five months is estimated to reach $262.54 billion, down 14.7 per cent on-year. Total imports were worth $126.37 billion, representing an on-year reduction of 17.9 per cent, in which the import turnover of Vietnamese enterprises stood at $43.95 billion, down 18.5 per cent, while that of FIEs hit $82.42 billion, down 17.5 per cent.

In the first five months, the economy has seen a trade surplus of $9.8 billion, far higher than the $7.56 billion trade surplus in the first four months. In which, Vietnamese enterprises suffered from a trade deficit of $8.76 billion while FIEs recorded a trade surplus of $18.56 billion including crude oil exports.

The National Assembly Economic Committee reported that in the second quarter of this year, the country’s trade landscape will “not get better due to continued shortages of export orders, and if there are orders, they are just of small scale with a limited number and low values,” and the situation “will continue lasting until the end of Q3.”

The government earlier set a target that this year, Vietnam’s total goods export-import value will be about $795 billion, up about 8 per cent against this year. In which the export turnover will be $398 billion, up over 8 per cent on-year. The trade surplus will stay at about $1 billion, far lower than the $11.2 billion recorded last year. However, the government reported that since early this year, Vietnam’s key and traditional export markets have been narrowing (see box), and many exporters in the country have been suffering from serious shortages of export orders. This has made it difficult to achieve the export goal for 2023.

Slow recovery puts dent in export figures Slow recovery puts dent in export figures

Feeble global demands for consumption are expected to continue, making it hard for Vietnam to boost exports this year.

By Khoi Nguyen

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