News Room - Business/Economics

Posted on 12 Mar 2009

Vietnam Jan-February exports down 5%

Statistics provided by the industry and trade ministry showed that February export brought in US$4.3 billion, up 25.1% month on month, lifting the total export turnover of the first two months of this year to US$8.023 billion.

 

Although the export turnover of Jan-February 2009 was equal to 95% of the previous year's first two months, the country reached the trade surplus of US$300 million, marking the rare event in Vietnam's goods export history. But a trade surplus is not necessarily good news for Vietnam.

 

Compared with Jan-February period of 2008, the export of agricultural products achieved US$1.619 billion, surging 10.4%, mineral exports gained US$1.118 billion, down 38% year-on-year, and industrial products US$5.286 billion, up 2.2%. In February alone, export of gemstones and precious metals gained US$800 million, rising 7.107%.

 

The key items posting a sharp fall in export turnover included crude oil down 42.3% despite the export output increased by 26.7%, leather shoes dropping 7.2%, wooden products down 26.4%.

 

Last month Vietnam spent about US$4.4 billion on imports, falling by 28.6% against last February, which raised the total import spending in Jan-February to over US$7.7 billion, a year-on-year slump of 43.1%. Import spending of equipments and spare parts tumbled 28.2% to US$1.7 billion, petroleum down 52.9% to US$753 million, steel imports decreased 71.6% to US$454 million, steel billet down 76.8% to US$89 million, apparel declining 27% and others. So, Vietnam's recorded trade surplus of US$300 million in the first two months of 2009 is unusual.

 

According to Dr Le Dang Doanh--senior economic specialist, former director of the Central Economic Management Institute, Vietnam's trade deficit problem was prolonged. Recently, the trade deficit was narrowed but the saying "Vietnam reaches trade surplus" needs to be defined correctly. Because Vietnam's US$300 million trade surplus in Jan-February was actually thanks to US$800 million earned from gold export and US$136 million of gemstone and precious metal export. The sum of money from gold and gemstone export could not show the industrial level of Vietnam. There should see a suddenly changed figure to claim on export capacity of the economy.

 

In his opinion, this is only a speculation problem. The country must have national reserve to monitor the domestic economy.

 

Dr Vo Tri Thanh—director of Department for Trade Policy and International Integration Studies (Central Institute of Economic Management) forecasted that the trade deficit in 2009 would not cause high pressure on the forex rate. Import spending will still increase but the trade deficit will reduce against 2008.

 

Meanwhile, this year ODA, FDI and overseas remittance will slump as well. The actualised FDI amount is estimated at about US$6-7 billion, which will not affect strongly to forex rate and inflation. However, in aspect of macro-economy, a predicted fall in import export activities forced Vietnamese economy to face many challenges.

 

To date, forecasts on the economic restore are different. Some international organisations predicted Vietnam's 2009 GDP at only 2-3% while most of foreign institutions confirmed the figure of 4.5-5%.