With growing exports, Vietnam to tackle related challenges

HANOI: Although gaining strong growth in export turnover in the first seven months of this year, Vietnam still faces many challenges to maintain the high growth in the export until this year-end, according to a Vietnam News Agency (VNA) report on Monday.

With the gradual recovery of the world market and increase of export orders, Vietnam’s trade activities in the first seven months achieved positive results.

The total trade turnover in July exceeded US$70 billion for the first time, of which exports reached a record of over US$36 billion, marking the month with the highest export value ever.

In the first seven months, export turnover reached US$266.9 billion, up 15.7 percent over the same period last year. Import turnover stood at US$212.9 billion, up 18.5 percent.

During those months, there were 10 import items with a value exceeding US$5 billion, including electronics, computers and components, common metals, phones and components, machinery, equipment, tools and spare parts.

11-12% growth forecast

Ac
cording to the forecast of MB Securities Joint Stock Company (MBS), exports will grow by 11 percent to 12 percent in 2024, with a trade surplus of US$12-14 billion.

This growth is based on the World Bank’s forecasts on the global trade in goods and services increasing by 2.5 percent in 2024 and 3.4 percent in 2025. Positive signs of FDI (foreign direct investments) in Vietnam are expected to play an important role in trade activities.

In addition, recent reforms in trade and customs policies have improved the efficiency of import-export management, simplified administrative processes and reduced costs and time for businesses.

Petrovietnam Securities Incorporated (PSI) also noted that consumer confidence is showing signs of recovery. The consumer confidence index on economic conditions in key markets, such as the EU and UK, also recorded slight recovery,

In addition, the number of new orders from the US, Vietnam’s key export market, increased, showing more optimism about this market’s demand in the future.

Therefore, PSI expects purchasing power in major export markets to recover more strongly in the second half of 2024.

Although the US has not recognised Vietnam as a market economy, PSI still maintains a positive view on Vietnam’s export enterprises this year because the US is still Vietnam’s largest export market, reported the Doanh nghiep Vietnam (Vietnam businesses) magazine.

Challenges

However, MBS believed that Vietnam’s export growth until this year-end will face many challenges, such as a spike in shipping costs due to geopolitical conflicts; and increasing competition from rival exporting countries.

Other challenges are negative impacts from the US’s prolonged high interest rates on Vietnam’s partner countries, leading to a decline in market demand.

Moreover, Vietnam’s economy is highly open, so it also is greatly exposed to global economic developments. This brings difficulties for industries with large export turnover such as textiles, wood and electronics.

According to the Ministry of Industry
and Trade (MoIT), although the export market has seen signs of recovery, the export recovery of products is still uneven and unstable.

Vietnam’s key export products to such major markets as the EU and the US are facing pressures from trade defence investigations, origin fraud and technical barriers related to the environment, sustainable development and green transformation.

The world economic situation still faces many difficulties and challenges, while the slow recovery of global trade, consumption and investment has affected the domestic economy.

Industrial enterprises, especially export ones, continue to face difficulties in expanding and diversifying markets due to high input material costs and compliance costs, especially with new regulations and standards. Lending interest rates are gradually decreasing, but they are still at a high level.