In 2012, the country got trade surplus for the first time after 20 consecutive years of witnessing trade deficit.
In that year, Vietnam’s excess of exports over imports reached $300 million.
Meanwhile, in the first three months of 2016 alone, the figure was $1.36 billion, according to the General Department of Customs (GDC), which was five times higher than trade surplus in the whole year of 2012.
The trade surplus has been praised as a great achievement, especially when it came after Vietnam experienced the year of trade deficit in 2015.
This was an impressive figure if noting that in 2014, which was considered the ‘golden period’, Vietnam’s trade surplus was $1.98 billion for the year.
|The trade surplus in the first quarter of 2016 alone was five times higher than that of the entire year of 2012. But this could be bad news.|
However, experts, while commenting that the trade deficit is an encouraging result, pointed out that there are many problems behind the figure.
In the first three months of the year, Vietnam exported $38.77 billion worth of products, an increase of 6.6 percent over the same period of last year.
This means that though the export value increased, it was still lower than the import turnover of the same period ($39 billion) last year.
Vietnam could gain a trade surplus in Q1 mainly because of import turnover, which for the first time in many years, decreased.
According to GDC, the import turnover was $37.4 billion, or 4 percent lower than that in the same period.
The growth rate in the export value has been decreasing rapidly compared with 2010, the time of an export boom, when Vietnam officially joined the World Trade Organizations (WTO).
While the import turnover in the same period of the previous years saw the 2-digit growth rates, the import turnover unexpectedly decreased this year. And this could be the sign of a production decline.
Vietnam needs to import input materials and fixed assets (machines and equipment) for production. If the imports decrease, this may be bad news.
While the registered capital of foreign invested enterprises (FIEs) increased considerably by 119 percent, their import turnover of machines and equipment decreased by $1.44 billion.
Analysts also pointed out that it was FIEs, not Vietnamese enterprises, which made the biggest contribution to Vietnam’s export growth.
FIEs’ export turnover accounted for 70 percent of total export turnover and had export turnover increasing by 10.8 percent if compared with the same period last year. Meanwhile, Vietnamese enterprises’ figures were 30 percent and minus (-) 2.2 percent.