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Thursday, July 18, 2024

Vietnam’s foreign trade sector struggles as global demand weakens

The Saigon Times

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HCMC – Vietnam’s export sector has encountered a significant slowdown in 2023, with both exports and imports falling at a double-digit rate in January-July, reported the Ministry of Industry and Trade.

The country’s total export revenue in July reached US$29.68 billion, up 3.5% compared to the same period last year. Domestic economic sectors saw a 4.2% reduction, while the foreign-invested sector, including crude oil, decreased by 3.2%.

In the first seven months of the year, Vietnam’s total export turnover was estimated at US$194.73 billion, a 10.6% decrease from the previous year.

The processing industry recorded a decline of nearly 12%, and fuel and minerals dipped by 16.4%. The agriculture, forestry, and aquaculture sectors slid 0.2%.

Key export markets have also been impacted, with exports to the U.S. plunging by 21.8% over the same period last year. Similarly, exports to the European market fell by 9.9%, ASEAN by 9.6%, South Korea by 8.8%, and Japan by 3.5%.

Weak global demand has had a significant impact on Vietnam’s imports in the seven-month period, which decreased by 17.1% year-on-year. Imports of machinery, equipment, tools, spare parts, fabrics, steel, rubber, and cotton have seen substantial declines, ranging from 14.6% to 39.3%.

In response to the challenges faced by businesses, the Ministry of Industry and Trade is actively engaged in negotiations and agreements to diversify markets and supply chains. The conclusion of the Free Trade Agreement (FTA) with Israel and the signing of other FTAs and trade agreements with partners such as the United Arab Emirates and the Southern Common Market are among the measures being undertaken.

The Ministry is also working to streamline customs procedures for agricultural and aquatic products while facilitating domestic enterprises’ connection with foreign direct invested companies operating in Vietnam.

The overall situation remains complex, with uncertainties arising from global geopolitical events and the prolonged effects of the Covid-19 pandemic. The Ministry’s efforts aim to support businesses, enhance production, and bolster Vietnam’s export competitiveness amidst prevailing challenges.

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