Imports of goods increased sharply, Vietnam continued to have a trade deficit

Product Description:

In the context that the fourth wave of the Covid-19 pandemic continues to develop complicatedly in Viet Nam, it has had a negative impact on the production and business activities of our country. Some provinces and cities with large industrial scale such as Ho Chi Minh City, Binh Duong, Ha Noi, Bac Ninh and Bac Giang have had a high number of cases, many industrial parks have to close, many factories have to suspend production. Production and export activities of some enterprises in industrial zones were affected. However, in the first 6 months of 2021, Viet Nam鈥檚 import and export still achieved some encouraging results: Total export and import turnover in the first 6 months reached 316.73 billion USD, rose by 32.2% over the same period in 2020; in which, import turnover continued to maintain at a fairly high growth rate of 36.1%, reaching 159.1 billion USD. Import turnover from major markets increased sharply over the same period in 2020: China increased by 53%; Korea increased by 21.1%; ASEAN increased by 47.7%; EU increased by 16.3%.

Import value of many items increased sharply over the same period in 2020, of which automobiles increased by 78.4%; other basic metals increased by 59.9%; plastics rose by 54.9%; phones all of kinds and their parts increased by 48.7%; iron and steel rose by 40.8%; machinery, instrument, accessory increased by 37.3%; chemical products went up by 34.5%; auxiliary materials for textile, footwear increased by 34.2%; fabric increased by 32.3%; electronics, computers and their parts increased by 22.9%; plastic products increased by 22%.

One of the reasons for the sharp increase in the import value of items is that the import price index in the first 6 months of 2021 increased by 2.24% over the same period last year (in the second quarter of 2021, it increased by 3.28%). In which, import prices of some important products for processing and production increased: Other basic metals increased by 12.8%; iron and steel increased by 7.65%; fabric increased by 1.65%; electronics, computers and their parts rose by 1.62%; machinery, instrument, accessory increased by 0.56%.

Import turnover in 6 months grew higher than export turnover (import increased by 36.1%; exports increased by 28.4%) brought the trade balance in the first 6 months of the year to a trade deficit of 1.47 billion USD (in the same period in 2020, the trade surplus was 5.86 billion USD). However, considering the structure of imported goods, the group of input materials accounted for 93.9% of the total turnover, a rise of 0.4 percentage points over the same period last year; import of input materials reached USD 149.32 billion, rose up by 36.7%; in which the group of machinery, equipment, accessory, means of transport and components reached USD 71.97 billion, increased by 33% and accounting for 45.2% (went down 1 percentage point); fuel and row materials reached 77.35 billion USD, went up 40.2% and accounting for 48.6% (went up 1.4 percentage point). Consumer goods group was estimated at 9.78 billion USD, rose by 28% and accounted for 6.1% (a drop of 0.4 percentage points). Import of input materials has a high growth rate, especially the group of goods for production, which is the group of fuel and raw materials, increased by 40.2% (the proportion increased by 1.4 percentage points), showing that signs of production recovery have made good progress and are positive.

However, if there is no solution to limit the trade deficit, the long-term trade deficit and especially the trade deficit of consumer goods will partly cause negative impacts in the economy. The high import of consumer goods, especially luxury consumer goods, will reduce the competitiveness of domestic goods, causing difficulties for domestic production activities.

Viet Nam鈥檚 economic forecast for the last 6 months of 2021 will continue to face many difficulties, the effective implementation of 鈥渄ual goals鈥 is a big challenge, requiring the joint effort and consensus of the Government, businesses and people , focusing on a number of contents related to import and export activities as follows: Protecting the health of workers in enterprises and industrial parks; continue to focus on removing difficulties for production and business enterprises, recovering the economy, supporting the business community in finding markets to import raw materials, fuel, materials, spare parts and replacement components; control and take timely measures to ensure the supply and prices of imported raw materials, fuels and input materials for domestic production; use appropriate tax policies in favor of importing raw materials and exporting finished products; effectively carry out trade promotion activities, promote products and categories, seek to expand export markets.