Last updated: Wednesday, May 15, 2019


New Impetus for Exports in 2019

Posted: Friday, December 28, 2018

Though put under mounting pressure, Vietnam’s exports reached most targets set by the National Assembly for 2018, thus paving way for further growth in 2019.

Vietnam’s export value was estimated at nearly US$240 billion in 2018, representing a year on year growth of 11.5 per cent, higher than the expected growth of 8 - 10 per cent. The country took a trade surplus of US$2 - 3 billion in 2018, said the Ministry of Industry and Trade.

Agriculture and fishery - Export highlight
Agricultural and aquatic products became a remarkable export, which is very important as Vietnam focuses on exporting products that are capable of being produced on mass scale and using advanced production technologies.

The country’s export prospects of fruits and vegetables are forecast to grow in the coming time, driven by abundant domestic supplies. The 2018 export value of vegetables and fruits is forecast to rise by 15 per cent compared to 2017.

Aquatic exports will be likely to thrive because the latest antidumping duty on shrimp and pangasius is much lower than preliminarily announced rates, resulting in higher confidence of exporters and higher prices of inputs and exports. The import demand rose by 10 - 20 per cent on average in remaining months of the year to serve public holidays, especially in major markets such as the United States, the European Union (EU), Japan and South Korea. Competitors are meanwhile facing production and market challenges and hardships (Thailand stopped importing Indian shrimp, thus downsizing Thailand's export supply; India is subject to a 50 per cent inspection in exports shipped to the EU and faces a risk of being banned by the EU). Therefore, in spite of facing hardships in the EU when receiving a yellow card by the illegal, unreported and unregulated (IUU) fishing regulations of the EU and the Catfish Monitoring Programme of the US, Vietnam’s aquatic exports are projected to rise 8.9 per cent year on year to US$9.05 billion in 2018.

In the previous years, the export growth of foreign direct investment (FDI) enterprises always outpaced that of domestic firms. But, the domestic sector has already outstripped the FDI sector.

By market, the United States is the largest export market of Vietnam, with US$43.7 billion, 15 per cent higher than in 2017. The EU is the second largest for Vietnam with US$38.2 billion, a year on year growth of 8.8 per cent, followed by China with US$38.1 billion, up 23.2 per cent, and ASEAN with US$22.7 billion.

However, many restrictions are also evident. The trade surplus goes to the FDI sector while the trade deficit is suffered by the domestic business sector. The trade deficit is inclined to industrial production but the trade surplus comes from the agricultural sector, which mainly exports low value products made by produced workers.

Vietnam runs a huge trade deficit with China as some key products depend heavily on Chinese supplies. When export-supported industries are not strong enough and free trade agreements (FTAs) take the rules of origin and supporting industrial capacity into account, Vietnam will be at a disadvantage.

Forecast for 2019
In 2019, Vietnam targets export growth of 7 - 8 per cent and a trade deficit of 3 per cent or lower of exports.

The Ministry of Industry and Trade forecast that if the world economy keeps growing, driven by major economies and developed countries and global trade and investment recovers, Vietnam will see a brighter prospect for exports. Domestically, macroeconomic stability is extended, GDP growth climbs, and industrial growth momentum is expanded, especially processing and manufacturing industries.

In the coming time, Vietnam will be affected by the US - China trade war, both upside and downside. Economic analyst Can Van Luc analysed that the US’s tax imposition on Chinese goods will slow growth. When China, which makes up for about 32 per cent of the global economy, has a problem, the whole region, including Vietnam, will be affected. This will result in a lower demand for goods, trade and equipment and this outcome will slow Vietnam’s commodity imports. This is similar to the case of the US.

The Ministry of Industry and Trade recommends that enterprises should continue to closely monitor world developments, especially the US - China trade war, in order to take the initiative in administration.

The process of negotiating, signing and approving free trade agreements between Vietnam and other countries, as well as carrying out international integration commitments are being focused to keep all on track in an effective and sustainable way.

Huong Ly

Other news

Yen sao Khanh Hoa
My Le
Vietnam Export Gateway
Tong cu DL