Commodity exports likely to gather full steam in second half

According to the Ministry of Industry and Trade, Vietnam raked in more than US$164 billion from exports in the first half of this year, a drop of 12.1% over the same period from 2022. The export turnover of the domestic economic sector decreased by 11.9%, or 0.3% less than the foreign direct investment (FDI) sector’s.

Seven localities that earned more than US$10 billion from exports included Ho Chi Minh City, Bac Ninh, Binh Duong, Thai Nguyen, Hai Phong, Dong Nai, and Bac Giang. With the exception of Bac Giang, the six remaining localities endured a contraction in export growth.

Statistics highlight that Ho Chi Minh City experienced a decrease of more than US$5 billion in export earnings, followed by Bac Ninh with nearly US$4.3 billion, Thai Nguyen with US$4.31 billion, Binh Duong with US$3.35 billion, and Dong Nai with US$2.53 billion.

The first half of the year also saw the national economy only expand by 3.72%, the lowest figure throughout the 2011 to 2022 period except for 2020. Despite efforts, industrial production has yet to fully recover, with the index of industrial production (IIP) of the whole industry decreasing by 1.2%. Indeed, this decline can be seen in the economy’s major hard currency earners such as electronics, garments and textiles, and wood processing.

Experts pointed out that localities had opportunities to reboot their production and exports, although the demand for goods in the main import markets remains low.

Paulo Medas, head of the International Monetary Fund (IMF) 2023 Article IV Mission to Vietnam, said the global economy is decelerating which has duly impacted Asian exporters, with demand from some of Vietnam’s main export markets, including the United States and the EU, falling sharply.

Exports fell by up to 12% in the first half of this year, which took a heavy toll on Vietnamese export businesses, with industrial production being the hardest hit, he said.

Vietnam is an open economy, therefore growth heavily relies on export recovery, along with the two main pillars: investment and the domestic market.

According to information given by international financial institutions, the Vietnamese economy is likely to recover ahead in the second half of this year thanks to export recovery, as well as support measures adopted by the Government, especially the fiscal policy, that will stimulate the economy.

In an attempt to further promote exports, the Ministry of Industry and Trade will host Vietnam International Sourcing 2023 expo, an event to connect international supply chains, in Ho Chi Minh City this September. The function is expected to attract 150 international delegations from 30 countries and territories globally. 

The event will effectively support businesses in their efforts to get more deeply involved in the global production and supply chains, directly export goods into foreign distribution networks, and intensively invest in technology innovation as a means of producing quality and high-value added products, said Vu Ba Phu, director of the Trade Promotion Department under the Ministry of Industry and Trade.

The Ministry of Industry and Trade reported that a series of hypermarkets and foreign retail distributors have made lists to buy food, textiles, shoes, backpacks, sports and outdoor goods, household appliances, and furniture from Vietnamese suppliers.

Large retail firms such as Aeon and Uniqlo of Japan; Walmart, Amazon, Boeing, and AES of the US; Carrefour and Decathlon of France; Central Group of Thailand; and Coppel of Mexico have all confirmed to participate in the expo.