The trade surplus is back

The annual export value of fruit and vegetables is forecast to grow

Turnaround

According to the General Department of Vietnam Customs, from the beginning of 2017 until October 15, export value reached nearly US$163.25 billion, and import value exceeded US$162.16 billion, generating a trade surplus of US$1.09 billion.

In the first six months of this year, Vietnam faced a continuous trade deficit. In the first four months, the deficit equaled more than four percent of total export value, higher than the limit allowed by the National Assembly (3.5 percent). This high trade deficit was attributed to increases in the import of machinery, equipment, spare parts and metals to serve the implementation of foreign direct investment (FDI) projects. The Ministry of Industry and Trade (MoIT) proposed a number of trade deficit curbing measures, including easing difficulties for businesses, creating more products for export, and disseminating information about free trade agreements (FTAs) to help businesses make the most of opportunities provided by such pacts.

The results manifested themselves in early May, when a decline in the deficit began. By the second half of July, Vietnam recorded a trade surplus of US$233 million and the upward trend continued.

Optimistic forecasts

From now until year’s end, export value is forecast to continue growing. Samsung Display, a major FDI project in Vietnam, increased its investment capital earlier this year and will create more products for export towards year’s end. Increased Samsung Display exports will contribute significantly to Vietnam’s export value of computers, electronic products and components.

The export value of processing and manufacturing industry products is also forecast to grow strongly because in the first eight months, Vietnam imported large volumes of materials to make export products. Moreover, autumn and winter are the export season for some industrial products, such as textiles, garments, footwear and wood products. Meanwhile, major markets will increase the import of fruit, vegetables, seafood, coffee and rice to serve their year-end festivals, so the export value of products in this group is predicted to increase.

According to Phan Sinh, Deputy Director of the Information Technology and Customs Trade Statistics under the General Department of Vietnam Customs, Vietnam will import about US$100 million worth of equipment to serve the Cat Linh-Ha Dong urban railway project from now until year’s end, so the import value will possibly increase.

The MoIT forecast 2017’s export value will possibly reach US$207 billion, up 17.2 percent compared with 2016, and import value will reach about US$208 billion, up 19 percent, generating a trade deficit of US$1 billion, equivalent to 0.5 percent of export value.