In September, export turnover of goods reached 27 billion USD, while imports reached 26.5 billion USD. Thus, after 5 consecutive months of trade deficit, the trade balance has returned to the “position” of trade surplus with a value of USD 500 million. This can be a good signal showing the recovery of businesses after the “freezing” period because of social distancing.
Trade balance returned to the position of trade surplus After many years of continuous trade surplus, April 2021 marked the return of the trade deficit of Vietnam’s goods trade balance. It was followed by a series of consecutive months of trade deficit that lasted until August. However, by September, the trade balance had returned to the “position” of trade surplus with a value of USD 500 million. Specifically, data from the General Statistics Office shows that the export turnover of goods in September reached 27 billion USD, in the opposite direction, the import turnover reached 26.5 billion USD. This can be a good sign showing the recovery of businesses after the “freezing” period because of social distancing.
Sharing with the writer, Dr. Huynh Thanh Dien, an economist, said that in the first months of the epidemic, businesses had not adapted to the changing production situation such as reducing capacity, “3 spot” regulations, high transportation costs, etc. .but then the business gradually got used to the difficulties, so they reconnected orders with partners, helping production activities to be gradually restored to a certain extent.
(Source: General Statistics Office. Graphics: Alex Chu)
“We are gradually moving from the state of “Zero COVID” to “adapting to the epidemic”, helping economic activities to be more open, businesses and partners around the world will realize this direction of the Vietnamese Government. Nam helped confidence increase again, orders have since returned.
Accordingly, domestic enterprises are also more adaptive such as changing management and production methods, consolidating supply chains step by step to ensure business operations,” the expert said.
Mr. Pham Van Viet, Chairman of the Board of Directors of Viet Thang Jean Co., Ltd., also admitted in August that the company decided to stop production because it found that the operation under the “3 on-site” option was ineffective. However, in September, Viet Thang Jean reorganized production with 40% of workers to complete urgent orders of international partners.
Also according to the business representative, if the business does not resume operations soon, it will lose orders, affecting the reputation and brand of the business.
“Enterprises and the whole industry will lose both goals, the epidemic is not under control and affect the economy if businesses are not strong enough to support,” Mr. Viet shared.
Analyzing more about the conditions for resumption of orders of enterprises, according to expert Thanh Dien, in fact, the production space of enterprises is quite large when the orders have been signed in advance and stretch to the end of the year. In addition, in recent times, the Government has directed to remove obstacles in freight transport, helping export activities to change positively.
Another reason for the trade balance to turn to surplus in the past month is that production plans of enterprises usually focus on signing contracts at the end of the previous year or at the beginning of the new year. is the time to increase the import of raw materials and in the third and fourth quarters, the factory is focused on production.
Therefore, Mr. Dien said that in fact, the enterprise has increased imports in the past time, until this stage, it only focuses on order fulfillment, so the trade surplus in September is partly due to this business rule.
Dr. Huynh Thanh Dien, Economist. (Photo: VNA)
It can be seen that the import and export results in September ended the chain of consecutive trade deficits in the past months, but in general, for the first 9 months of 2021, trade in goods still had a deficit of 2.13 billion USD, while the same The period of 2020 has a trade surplus of 16.6 billion USD.
The Ministry of Industry and Trade said that due to the recovery of the world economy’s demand, businesses have increased the amount of imported materials to serve production, along with the increase in world commodity prices, so the import price of raw materials has increased. input for production increased, contributing to increase import turnover.In addition, the increase in sea freight rates also increases costs, increases the value of imports, and exports decelerate from June until now.
“In June, the COVID-19 epidemic had a strong impact on the exports of enterprises in Bac Giang and Bac Ninh, while in the months of July, August and September, the COVID-19 epidemic had a strong impact on the exports of enterprises in other countries. These are the main reasons leading to the trade deficit in the first nine months of 2021”, the report of the Ministry of Industry and Trade said.
Notably, despite the trade deficit in 9 months, looking at the export results of many groups of goods, it can be seen that the increase in both quantity and export price has partly saved the export turnover that was expected to deepen. missing after many difficult months because of the epidemic.
Typically, with some agricultural products such as cassava, up 50.2% in output and 67.6% in value, rubber increased by more than 17% in volume and 52.7% in export value. password; Although the quantity of pepper decreased by 3.3%, the value increased by nearly 47%.
(Source: Ministry of Industry and Trade. Graphics: Alex Chu)
As for the group of fuels, minerals and processing industries, a number of commodities recorded a sharp increase in both volume and value such as coal, which increased by 147.4% and 126.5 percent, respectively; iron and steel of all kinds increased by 125.4% and 39.3%.
However, despite accounting for the highest proportion in export groups, many products of the processing industry declined sharply in volume such as wood and wood products down 35.3%; textiles and garments down 18.6%; footwear of all kinds decreased by 44.2%…so it was not “enough” to pull the 9-month trade balance towards trade surplus.
(Source: Ministry of Industry and Trade. Summary: Nhu Huynh)
At the end of 2021, can you still have a surplus?
Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), shared at the regular press conference on September 30 that the growth rate and export turnover in 9 months is still at a high level. is 18.8%, while 2020 will only grow at 7-10%. In particular, in September, the merchandise trade balance recorded a trade surplus of USD 500 million.
Generally, in the first nine months of 2021, our country has a trade deficit of 2.13 billion USD. If compared with import turnover, equivalent to 0.8%.
“This is not a huge gap and we are three months into the fourth quarter. Therefore, if there are no major changes in disease control, in the last three months of the year, businesses, especially those in the South, will regain their recovery and growth momentum.
At that time, we can completely believe that by the end of 2021, the trade balance will remain at a balanced level. And if the situation is more optimistic, we can have a trade surplus at a certain rate,” forecasted Mr. Tran Thanh Hai.
Accordingly, with the scenario that the epidemic is under control and production activities are soon restored, the Ministry of Industry and Trade forecasts that exports for the whole year 2021 are estimated at about 313 billion USD, an increase of about 10.7% compared to 2020. , exceeding the target assigned by the Government as well as the plan set out by the Ministry of Industry and Trade of 4-5%.
According to the Ministry of Industry and Trade, the basis for making this forecast is that in the coming time, Vietnam’s export activities will have many advantages when businesses continue to effectively exploit FTAs, along with the demand for goods and services. The market is increasing at the end of the year shopping.
In particular, a good sign is that Ho Chi Minh City is gradually reopening, helping businesses gradually recover production and business. Accordingly, as the most important locality in the Southern key economic region, the opening of Ho Chi Minh City will help neighboring localities boost the growth of commodity exports.
“The basic market is currently unchanged. The purchasing power of the world market is stable, with a slight increase when countries are actively importing goods to serve the year-end shopping season.
Therefore, businesses can return to production as soon as possible, have cash flow to cover costs, receive workers back to work and race to complete delayed orders, keep customers to get new contracts”, said a representative of the Ministry of Industry and Trade.
However, in the more negative scenario, according to the Ministry of Industry and Trade, the fourth quarter is the import cycle, so it will often increase, so it is expected that the whole year imports will increase by more than 20%, with a trade deficit of about 2 billion USD.
Economist Nguyen Xuan Thanh. (Screenshots)
Sharing at the webinar Economic picture of Vietnam and Mekong Delta: Economic forecast for the fourth quarter and prospect of 2022 taking place on October 1, economist Nguyen Xuan Thanh also said that in order to get If growth returns in the fourth quarter, it must open immediately and maintain that opening, but cannot return to wide-ranging distance as in the past time.
“If it opens and closes again, it will not only fail to recover, but will lead to economic collapse in 2022. But if businesses open and adapt safely from the beginning of October, businesses can return by mid-October. return to production and growth in the fourth quarter may increase by 3.5% and the whole year by 2.1%”, economist Nguyen Xuan Thanh forecast.
However, Mr. Thanh also noted that achieving the growth threshold of 3.5% in the fourth quarter is also a challenge, and full-year growth above 3% is very difficult. If the opening is still hesitant, fourth quarter growth will be less than 2%, GDP for the whole year will only increase about 1%. If it can’t open, there will be no growth in the fourth quarter, and the whole year will have negative growth.
However, this plan also needs to be accompanied by easing conditions so that businesses can resume operations without requirements such as “3 in place”, epidemic control and risk management by compliance, monitoring instead of requiring businesses to apply for licenses.
At the same time, transportation and logistics activities need to be resumed, open and flexible. Vehicle drivers and logistics workers who inject a full dose of vaccine or have negative results within 72 hours are safety criteria instead of green-flow QR permits.
According to Mr. Huynh Thanh Dien, although there is still hope for the reopening of Ho Chi Minh City so that production and export activities of enterprises will be restored, experts still have certain worries.
“Currently, the number of infections is still high, when reopening businesses, they must pay attention to ensuring safety against epidemics, and must have a mobile medical system to effectively control them, otherwise when businesses encounter an increase in the number of infections. forcing them to close and this will cause the business to go bankrupt.
Because compared to closing, just opening for a while has to close with a series of investments and operations, which will cause businesses to lose a lot,” said expert Huynh Thanh Dien.
However, according to this position, in the context of the epidemic, the consumer market of countries around the world may decrease, but goods still have to be produced to meet consumer demand when the economy recovers.
Therefore, the country that soon creates favorable conditions for businesses to both open production and ensure safety, the confidence of international customers will be placed in that country and orders will return to businesses. .
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