Foreign trade drives GDP growth

06:00 | 25/07/2022 Trade

(VEN) - Vietnam’s gross domestic product (GDP) grew 7.72 percent and 6.42 percent in the second quarter and first half of 2022, respectively. Foreign trade was a major driving force of this growth, according to the Ministry of Planning and Investment’s General Statistics Office of Vietnam (GSO).

GSO data put foreign trade at US$371.17 billion in the first half of this year (up 16.4 percent from the same period last year), with exports and imports growing 17.3 and 15.5 percent, respectively, and trade surplus reaching US$710 million.

foreign trade drives gdp growth
Electronics, a key export of Vietnam

The foreign trade growth made an important contribution to Vietnam's GDP growth in the second quarter and the first half of 2022, said GSO General Director Nguyen Thi Huong.

According to Huong, there were four bright spots in the country’s foreign trade. First, Vietnam imported raw materials worth US$92.7 billion in the first six months of 2022, an increase of 18 percent over the same period of 2021, 2.5 percentage points higher than the overall growth rate of imports. This increase reflects a recovery in the demand for imported raw materials for production in the post-COVID-19 period.

Second, apart from the country’s major exports including electronics, phones, computers and components, produce, forest product and seafood exports, in which Vietnam enjoys comparative advantages, also experienced high growth. Specifically, seafood exports reached US$5.8 billion (up 39.6 percent from the same period last year), coffee exports US$2.3 billion (up 49.7 percent), pepper exports US$566 million (up 14 percent), cassava and cassava product exports US$783 million (up 28 percent), and confectionery and cereal product exports reached US$472 million (up 19.5 percent).

foreign trade drives gdp growth
foreign trade drives gdp growth

Third, material and fuel exports increased, with chemicals yielding US$1.7 billion (up 59.3 percent), plastic raw materials US$1.3 billion (up 19.5 percent), raw materials and accessories for textile, leather and footwear industries US$1.2 billion (up 20.6 percent), paper and paper products US$944 million (up 19.2 percent), textiles and garments US$18.7 billion (up 21.6 percent), footwear US$11.9 billion (up 14.8 percent), and bags, wallets, suitcases, hats and umbrellas brought in US$2 billion (up 20.4 percent).

Fourth, exports to key markets, which have signed free trade agreements with Vietnam, maintained high growth, with those to the US reaching US$55.9 billion (up 22.5 percent), sales to the EU amounting to US$23.6 billion (up 21.6 percent), and those to China reaching US$26.3 billion (up seven percent).

While the COVID-19 pandemic is gradually controlled and global demand for goods, raw materials and fuel is growing, free trade agreements offer important advantages in terms of trade and investment.

However, the GSO’s representative warned that Vietnam's export producers will face increased production costs due to higher prices of fuel and imported raw materials.

Huong said the government and relevant authorities need to ensure oil and petrol price stability, help businesses expand export markets, and provide them with tax- and fee-related support.

Nguyen Hoa