Vietnam records trade deficit of nearly 800 million USD in January

Illustrative image (Photo: VNA)

Hanoi, (VNA) – Vietnam saw a trade deficit of about 800 million USD, accounting for four percent of the country’s export value in January.

The month saw export growth, but in the first month of 2019, the trade deficit has returned.

Slowdown in phone exports

Statistics from the Ministry of Industry and Trade (MoIT) show that export turnover was estimated at 20 billion USD in January, up 1.9 percent from December 2018, but down 1.3 percent from the same period in 2018.

State-owned enterprises (SoEs) exported about 6.42 billion USD worth of goods, up 7.8 percent and the foreign invested sector (including crude oil) reached 13.58 billion USD, down 5.1 percent compared to the same period in 2018.

Notably, exports of phones and components earned 2.85 billion USD, down 27.5 percent. Similarly, electronics, computers and components also dropped 5 percent, while cameras and camcorders fell 9.1 percent over the same period last year.

"The decrease in phones and components export value was the main reason for export slowdown in January," according to the Ministry.

However, exports of textile and garment, footwear, machinery and equipment, and spare parts saw a relatively high increase, contributing 5.7 billion USD.

Besides, exports to traditional markets remained stable and grew, in which, shipments to Asian markets were estimated at 10.98 billion USD, up 2.9 percent; to Japan worth 1.63 billion USD, to the Republic of Korea worth 1.53 billion USD, up 3.9 percent and 3.8 percent over the same period last year, respectively.

- The largest export markets in January:

Trade deficit of 2.6 billion USD among domestic enterprises

Imports were estimated at 20.8 billion USD in January, up 1.7 percent compared to December 2018, of which, the domestic sector made up 9.05 billion USD, up 3.1 percent. The foreign direct investment sector accounted for 11.75 billion USD, up 0.7 percent from the same period last year.

According to the MoIT, the increase in import value was buoyed by high demand for consumption goods during the Tet holiday, as well as serving business expansion and material storage for post-Tet production.

Production was boosted in early year (Photo: VNA)

The most imported products in January included cotton, up 12.3 percent; fibre, yarn and textile, up 11.5 percent; textile and garment materials, leather and footwear up 4.6 percent; and machinery and equipment by 3.8 percent.

China remained Vietnam's largest import market with import value estimated at 6.1 billion USD, an increase of six percent from the same period in 2018. It was followed by the Republic of Korea, worth 4.05 billion USD, falling by 5.8 percent; ASEAN, 2.78 billion USD, up 3.7 percent; Japan, 1.6 billion USD, up 5 percent; EU, 1.3 billion USD, up 15.5 percent; the United States, 1.1 billion USD, up 20.8 percent.

As a result, January recorded a trade deficit of about 800 million USD, equivalent to four percent of export value, in which, the domestic sector accounted for 2.6 billion USD, while the foreign investment sector saw a trade surplus of 1.8 billion USD.

MoIT Deputy Minister Do Thang Hai said all markets with trade deals have seen outstanding growth. In 2018, Vietnam's exports to ASEAN market and the Republic of Korea increased by 13.7 percent and 23.2 percent, respectively.

Notably, Vietnam has also gained a significant trade surplus with developed countries, including the US, the EU and Japan.

"These are strict markets, the export surplus proves Vietnam’s production and goods quality are getting better," Hai said.

Over the last two years, Vietnam has seen consecutive trade surplus, worth more than 7 billion USD in 2018, according to Deputy Minister Hai.

However, Vietnam’s two-way trade relations rely heavily on such countries as the US, Japan, China and the Republic of Korea, meaning their economic fluctuations will have a major impact on Vietnam’s trade activities

In 2018, the whole country saw a trade surplus of more than 7.2 billion USD, in which some markets with big trade surplus were the United States and the EU.

Also in the past year, Vietnam has 29 products earning over 1 billion USD in export value, 8 items earning over 5 billion USD and 5 items, over 10 billion USD.-VNA