Imports, Exports Grow in Late 2023

With timely support policies from the Government and central agencies and ongoing efforts of the business community, import and export performance positively advanced towards the end of 2023 to overcome difficulties and create a growth foundation for 2024.

Better export performance

In 2023, the global economy continued to be complicated and unpredictable. This situation directly impacted opening countries like Vietnam. Specifically, Vietnam was hit by the post-Covid-19 period due to shrinking export markets and slowly recovered global economy. Imports and exports in 2023 were also wrecked by macroeconomic performance. Total export and import value was estimated at US$683 billion, down 8.3% year on year, of which exports accounted for US$354.5 billion and imports made up for US$328.5 billion, down 5.9 %.

Later in the year, import and export performance looked up. In November, the total merchandise import and export value rose 5.9% to an estimated US$60.88 billion. With the late-year recovery, the export decline narrowed significantly for the whole year, much lower than the 12% decline in the first half of 2023. In particular, trade surplus continued to make a record for the eighth consecutive year, estimated at nearly US$30 billion, an increase of more than 250% over 2022.

This result positively contributed to the balance of payments, helping increase foreign exchange reserves, stabilize exchange rates and other macroeconomic indicators.

Regarding key exports, the Ministry of Industry and Trade pointed out that 33 products earned at least US$1 billion of export revenue in the first 11 months of 2023, accounting for 93.1% of total export value. Seven exports earned over US$10 billion, accounting for 66% of total exports.

Notably, agricultural products impressively contributed to the country's export performance. Aquatic products rose by 1.4% (to US$800 million); vegetables and fruits jumped most at 65.2%; and rice grew by 59.6% (US$500 million). Especially, vegetables and rice are two among 33 billion-dollar exports in 2023.

Thus, the export value of agricultural and aquatic products was forecast to reach US$3 billion in November, up 26.7% year on year. This was also the only advancing export in the first 11 months of 2023, earning US$29.5 billion, which was 8.6% higher than a year earlier.

The United States was Vietnam's largest export market with US$88 billion while China was Vietnam's largest import market with US$99.6 billion.

Regarding imports, inputs for production notably continued to go up in the import value in November. The import value of machinery, equipment, tools and spare parts edged up 0.9% to US$3.6 billion; plastics leaped 21.2% to US$1.1 billion; and chemical products soared 15.9% to US$750 million. In the first 11 months of 2023, the merchandise import value was forecast to fall 10.7% year on year to US$296.67 billion, of which the domestic economic sector made US$105.94 billion, down 8.8%, and the foreign invested sector earned US$190.73 billion, down 11.7%.

Vietnam continued to have a trade surplus of US$25.83 billion in 11 months (versus US$10.3 billion a year earlier), of which the foreign-invested sector accounted the highest share (including crude oil) of US$45.82 billion. However, the domestic economic sector incurred a trade deficit of US$19.99 billion.

Fixing problems, limiting backlogs

Due to the weaker buying demand from the United States and the EU, it posed many difficulties to domestic companies on a sharp decline in foreign orders, weak purchasing power in China after the reopening, high input costs and difficult access to credit sources.

To reduce the above difficulties for exporters, the Ministry of Industry and Trade will promote negotiations and signing of new agreements, commitments, and trade links, including completing and implementing free trade agreement (FTA) with Israel and signing FTAs with other potential partners (like UAE and MERCOSUR) to diversify markets, products, and supply chains. At the same time, the ministry will support businesses to take advantage of FTA commitments, especially CPTPP, EVFTA and UKVFTA, to boost exports, through propaganda on rules of origin, certificates of origin, FTA opportunities and challenges.

The Ministry of Industry and Trade also coordinated with the Ministry of Agriculture and Rural Development to negotiate with China to open up the export for other Vietnamese fruit and vegetable products such as green-skinned grapefruit, fresh coconut and star apple. The ministry will enhance the effectiveness and regulate the speed of customs clearance of imports and exports at border gate areas between Vietnam and China, especially for seasonal agricultural and aquatic products.

In addition, a big challenge for 2024 is to ensure very strict green export requirements and standards of importing countries. Regarding solutions, trade experts point out “seven necessary actions” that businesses must take to achieve them: Diversifying trading partners; assessing risks, planning scenarios, developing strategies to reduce carbon emissions; taking part in carbon offset projects; evaluating the level of carbon intensity; investing in innovation and technology; and engaging in industrial cooperation initiatives. Only then will export activities develop sustainably.

By Gia Huy, Vietnam Business Forum