What is the outlook for Vietnam’s trade balance?

Among Vietnam’s export products, the items that recorded the positive growth rate in October 21, 2021, include crude oil (150.4% YoY), steel (140.0% YoY)...

Per GSO data, Vietnam’s export value edged up 1.1% mom (0.3% YoY) to about US$27.3bn in October 2021. In VNDirect’s view, there are several factors that support the recovery of exports in 4Q21, including (1) southern provinces have eased social-distancing measures since late-September, thus allowing most of the factories and industrial parks to reopen, (2) strong demand for Vietnam's export goods during the year-end consumption season in developed markets. For 10M21, export value climbed to US$267.9bn (16.6% YoY).

Among Vietnam’s export products, the items that recorded the positive growth rate in October 21, 2021, include crude oil (150.4% YoY), steel (140.0% YoY), petroleum (103.0% YoY), plastic materials (62.9% YoY), and rice (44.8% YoY). On the other hand, some products saw a strong decline, including footwear (-46.4% YoY), non-wooden furniture (-40.3% YoY), wood & wooden products (-39.2% YoY), bags and suitcases (-38.3% YoY), and toys & sports equipment (-26.2% YoY).

Based on the actual performance of the manufacturing sector and exports activities, VNDirect maintained its forecast for 2021F Vietnam’s export value growth at 15% YoY.

As for imports, Vietnam’s import spending dropped 1.1% mom (vs. a 3.6% mom decline in Sep 2021) to about US$26.2bn (8.0% YoY). As a result, Vietnam increased net exports to US$1.1bn in Oct 2021 from a net export of US$0.5bn in the previous month. For 10M21, import value climbed to US$269.4bn (28.2% YoY), and Vietnam net imported US$1.5bn in 10M21 (vs. a trade surplus of US$19.6bn seen in 10M20). 

Among Vietnam’s key import products, the items that witnessed the strong import growth rates in Aug 2021 include rubber (137.6% YoY), fertilizer (90.7% YoY), cotton (64.4% YoY), chemical products (62.2% YoY), and steel (51.8% YoY).

Vietnam's export activities are getting many favorable conditions even though the global supply chain has been broken. In the coming time, the export opportunities of Vietnamese enterprises will certainly continue to expand if the world economy continues to recover as it is now. Along with that, the group of agricultural products is likely to continue to hit higher export prices. The prices of fuels, energy, minerals… will go up due to high fuel consumption demand in winter. Therefore, Vietnam needs to speed up the vaccination schedule to soon achieve herd immunity, helping businesses expand production scale and even increasing export scale so as to take advantage of export opportunities.

The Import-Export Department (Ministry of Industry and Trade) said that with the current export rate, it is expected that in the last 2 months of this year, Vietnam’s export will continue to grow well. If there are not too big fluctuations, this year's export value is expected to reach about 320 billion USD. And the total import-export turnover will reach about 640-650 billion USD, surpassing 600 billion USD for the first time.

Meanwhile, VNDirect expected Vietnam’s trade surplus to reach US$0.3bn in 2021F (vs. trade surplus of US$19.9bn in 2020).