Optimistic Export Performance in H1, 2024

Vietnam's optimistic export performance significantly bolstered the nation's economic growth throughout the first half of 2024. The total value of merchandise imports and exports reached an estimated US$369.6 billion, a 16% increase compared to the previous year. Of this total, exports amounted to US$189.5 billion, up 14.2%, while imports surged to US$180.2 billion, an 18.1% rise.

 Seafood exports in the first half of the year exceeded US$4.4 billion, marking a nearly 7% increase from the corresponding period in 2023

Positive growth in price and volume

Vietnam had a trade surplus of US$11.63 billion in the 6-month period, higher than the value a year earlier. This positive result contributed to increasing forex resources for the economy.

The high and steady growth was seen across all three commodity groups: agriculture, forestry and fisheries; processing industry; and handicraft.

The agricultural, forestry and fishery category continued to play a key role in exports, with an estimated value of US$53.2 billion, up 17.9%. High-growing items included vegetables (25.3%), seafood (16.2%) and cashew nuts (15.4%).

The processing industry reaffirmed its important position in exports with an estimated value of US$132.8 billion, up 13.1%. Key exports consisted of telephones and components (16.9%), computers, electronic devices and components (16.1%) and textiles and garments (12.5 %).

Handicraft exports grossed US$3.5 billion, up 7.4%. High-growth items in this category consisted of wooden furniture (9.5%), bamboo and rattan (8.1%).

Mr. Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade (AFT) under the Ministry of Industry and Trade, highly appreciated the export performance in the first half of 2024, stating that this result was a testament to the effort of exporters and the effective support of governmental policies. Moreover, some factors are promoting export and import recovery, including Vietnam's policy on international economic integration and market diversification following negotiations and signing of new generation free trade agreements.

Remarking on trade promotion results in the first six months of the year, Mr. Vu Ba Phu, Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said that trade promotion has helped connect manufacturers with domestic and foreign markets, effectively support businesses in penetrating and searching for markets, strengthening production cooperation, and bolstering product consumption.

Accordingly, trade promotion has been focused on tapping free trade agreements (FTAs) to diversify markets and supply chains and boost exports; accelerating import and export development of economic regions; attracting foreign investors into the processing and manufacturing sector to improve the quality of domestically made products to meet world market standards; and coordinating with the Vietnam Trade Office system abroad to consult and provide market information for localities and businesses.

According to a report from the Ministry of Industry and Trade, high inventories in export markets are gradually being addressed, especially in key export markets that encountered difficulties in 2023 such as the European Union and the United States. Recovering consumer indicators in the US became an important support factor for economic growth.

Handicraft exports totaled US$3.5 billion, achieving a growth rate of 7.4%, notably driven by wooden furniture (9.5%), bamboo and rattan products (8.1%)

Export boosting solutions

Mr. Hai also noted some difficulties and challenges against exports in the coming time like world economic and political turmoil, US-China trade tensions and rising input prices. Therefore, businesses need to actively adapt to such developments and have appropriate solutions to maintain export growth momentum.

Regarding export promotion solutions, the Ministry of Industry and Trade will continue to reform trade promotion, with focus on digital transformation in trade promotion and peer matching (especially producers of agricultural and aquatic products) of Vietnam with the Vietnam Trade Office system abroad to introduce and promote products and seek opportunities for market expansion.

Additionally, the ministry’s agencies need to review key products and key markets that need to be prioritized to carry out trade promotion in the short, medium and long terms. At the same time, they will closely coordinate to jointly deploy a series of professional activities within the framework of a trade promotion program in order to enhance the outcome and save resources amid the limited state budget for this.

Moreover, central agencies need to work together to direct localities, trade associations and businesses to propose and develop trade promotion plans to develop domestic and export and import markets and digital transformation in trade promotion in line with strategies and projects approved by the Prime Minister.

While many of Vietnam's export markets continue to add new requirements for international trade, establish more market barriers, and increase trade protection and green transformation trends, with focus on products that protect and boost health, carry organic properties and have elements of energy conversion and sustainable development.

According to Deputy Minister of Industry and Trade Nguyen Hoang Long, the ministry will concentrate on new contents to bolster trade promotion in the last six months of 2024 like informing to businesses and localities of the most important contents of free trade agreements, especially with important markets. Trade promotion will not only be accelerated by the cooperation with the Vietnamese trade office system in the world only but also coordinated with localities, especially regional links and sectoral links, to boost this activity.

By Huong Ly, Vietnam Business Forum