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FDI sector posts over 14 billion USD in four-month trade surplus

Despite an overall export decline due to the shortage of orders, foreign direct invested (FDI) businesses still posted more than 14 billion USD in trade surplus in the first four months, further affirming their role as the main growth driver of the economy.
FDI sector posts over 14 billion USD in four-month trade surplus ảnh 1A garment factory in Vietnam (Photo: VNA)
Hanoi (VNA) – Despite an overall export decline due to the shortage of orders,foreign direct invested (FDI) businesses still posted more than 14 billion USDin trade surplus in the first four months, further affirming their role as themain growth driver of the economy.

Trade turnover totalled 206.76 billion USD during January - April, down15.3% year on year, with those of FDI and domestic businesses at144.02 billion USD and 62.74 billion USD, respectively dropping 15.1% and 15.8%,according to the General Department of Vietnam Customs.

Theslow global economic recovery and tightened monetary policies in many countrieshave lowered the consumption demand in some major partners of Vietnam,leading to decreases of orders and a 13% fall in the four-month export revenue.

However,the FDI sector still recorded a trade surplus of 14.18 billion USD as a resultof 79.1 billion USD in exports, down 12.4%, and 64.92 billion USD in imports,down 18.3%. Meanwhile, the domestic one saw a trade deficit of 8 billion USD.

In2022, Vietnam shipped abroad 371.5 billion USD worth of goods, including 275.9billion USD (or 74%) by FDI firms, statistics show.

TheFDI sector plays a considerable role in the growth of the Vietnamese economy asseen in its contributions to export revenue, job creation, and formation ofsupply chains in key export industries like electronics, garment, and footwearproduction, said Phan Huu Thang, former Director of the Foreign InvestmentAgency at the Ministry of Planning and Investment, as cited by Dau tu (VietnamInvestment Review).

Thecontinuous rise of trade surplus for the past nearly 10 years is partly attributedto the substantial role of FDI enterprises, which have helped Vietnam becomeone of the 20 largest trading economies. Its economy’s total foreign tradetopped 730 billion USD by the end of last year.

However, the overdependence on the FDI sector for export has also revealed certain problems. Whiledomestic businesses have witnessed a serious trade deficit, large exporters,mainly FDI firms, in big export industries like garment, electronics, andfootwear have had to apply lay-offs or furloughs due to order shortages.

EconomistLe Quoc Phuong pointed out that in recent years, export has grown strongly injust quantity instead of quality. The added value in overseas shipments isstill lower than that in other ASEAN countries such as Thailand, Singapore, andIndonesia.

FDIbusinesses is in integral part of the economy, but it also is necessary togradually improve the competitiveness of domestic firms and their engagement insupply chains for the FDI sector right in the domestic market, he noted./.
VNA
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