08:56 | 25/02/2019 Trade
(VEN) - In 2018, impressive import, export results contributed significantly to Vietnam’s gross domestic product (GDP) growth and macroeconomic stability, as well as its successful efforts to maintain stable exchange rates, control inflation and improve the balance of payments. The results created an impetus for achieving the targets set for 2019.
High export value
At a meeting to summarize operations of the Domestic Market Management Team in 2018, Nguyen Thi Mai Linh, Head of the Agricultural, Forest and Aquatic Product Import, Export Division of the Agency of Foreign Trade under the Ministry of Industry and Trade, said Vietnam’s export value continued to increase strongly.
In December, foreign trade value reached an estimated US$42.2 billion, up 5.9 percent compared with December 2017. The annual import, export value exceeded US$482.23 billion, 12.64 percent higher compared with 2017. Export value reached an estimated US$245 billion, up 13.8 percent and exceeding the target set for 2018; and import value was up 11.5 percent, reaching an estimated US$237.5 billion.
The 2018 export growth was much higher than the target set by the National Assembly and the government, contributing significantly to GDP growth, generating jobs and helping farmers sell their products. The trade surplus helped Vietnam increase its foreign currency reserves, keep the exchange rate stable and maintain macroeconomic stability.
In the context of complicated changes in the regional and global situation, including the trade war between the US and China and growing trade protectionism across the world, Vietnam’s 2018 export growth was particularly impressive, especially coming as it did on top of the good results of 2017 (more than US$215 billion). Vietnam attributes this achievement to concerted efforts by businesses and effective management by the government.
Linh added that in 2018, the structure of export goods continued to show positive changes. Raw material exports decreased while the export of processed and industrial products increased. This is in line with the roadmap for implementing Vietnam’s strategy to promote foreign trade in the 2011-2020 period, with an orientation towards 2030, increasing the presence of Vietnamese goods in global production and supply chains. In 2018, 29 kinds of goods achieved annual export value exceeding US$1 billion, including eight products with annual export value of over US$5 billion and five products with annual export value of more than US$10 billion.
Vietnamese exports have reached most markets worldwide, including discerning markets with strict requirements in terms of product quality, such as the EU, Japan and the US. Exports to countries that have signed free trade agreements (FTAs) with Vietnam soared compared with the time prior to the signing of FTAs. The year 2018 also saw Vietnam’s efforts to promote exports to new, potential markets. The export value to most regional markets, except Africa, grew, especially to markets having FTAs with Vietnam, such as ASEAN, the Republic of Korea, Australia and New Zealand, Linh said.
Vietnam recorded trade surpluses with developed countries, such as the US (up from US$32.24 billion in 2017 to US$34.7 billion in 2018); and the EU (US$26.14 billion in 2017 and US$28.7 billion in 2018).
Exports by domestic companies continue growing. In the past, businesses with foreign direct investment (FDI) always achieved higher export growth compared with domestic companies. However, things have changed in recent years. In 2018, the export value of domestic companies reached about US$69.2 billion, up 15.9 percent compared with 2017, higher than the export growth of the whole country and 13.6 percent higher compared with that of the FDI sector (not including crude oil).
Along with promoting exports, Vietnam has controlled imports effectively in recent years, reducing the import of restricted goods and increasing the import of goods needed for domestic production and consumption, as well as materials required to make products for export.
Because of efforts to promote exports and control imports, Vietnam continued to record a high trade surplus in 2018, US$7.2 billion, more than triple that of 2017. This enabled Vietnam to maintain a positive balance of payments and stabilize other macroeconomic indexes.
Prospects for 2019
Despite some oversupply in global markets and the tightening of non-tariff measures to protect domestic production, the Ministry of Industry and Trade is determined to increase the 2019 export value by 7-8 percent and curb the trade deficit at below three percent of total export value. To achieve this goal, the ministry continues keeping a close watch on market changes in order to take suitable production and trade promotion measures to help domestic businesses take advantage of FTAs to boost exports.
At the same time, the ministry continues efforts to enhance the effectiveness of trade promotion activities in order to seek new export markets along with strengthening the role of the domestic market. The ministry will concentrate on disseminating information to improve the awareness of international integration. Suitable policies will be applied to enable domestic businesses to make the most of opportunities and minimize the adverse impact of international integration.
The ministry will continue its efforts to create a fair competition environment and protect domestic production sectors. It will further slash business conditions to facilitate business operations.
Administrative reforms will be accelerated to slash red tape and decentralize control to give localities more authority.