Trade deficit at record low

Statistics from the Ministry of Industry and Trade (MoIT) indicates positive signs for exports since the beginning of 2010.

Exports on the rise

According to the MOIT, exports in May reached US$6.1 billion, up 37.5 percent compared to the same period last year, bringing the export turnover in the first five months of 2010 to US$25.83 billion, up 12.6 percent year-on-year and accounting for 42.7 percent of the year’s target.

Of the total, the domestic investment sector is estimated to contribute US$12.02 billion, up four percent while the foreign investment sector contributed US$13.8 billion, up 25.9 percent.

In May, exports of agricultural, forestry, and aquatic products rose by seven percent due to increasing export prices. The highest increase belonged to rubber (85.3 percent), followed by pepper (54.9 percent), cashew nuts (24.7 percent), tea (19.7 percent) and aquatic products (18 percent).

Meanwhile, some export products experienced decrease like coffee, rice, cassava, crude oil, and coal.

Processing industrial products saw the biggest increase of 11.6 percent in which steel and chemical substances shot up by over 340 percent, electrical cable by 200 percent, and rubber products by 91.6 percent.

Import surplus remains low

In May, the import surplus stood at US$750 million, constituting only 12.3 percent of export turnover, the lowest figure since the beginning of this year.

The turnover of import surplus in the first five months reached US$6.85 billion, up 5.5 percent compared to April and 19 percent year on year.

Total turnover in the first five months was estimated at US$31.2 billion, 29.8 percent higher than last year to which the domestic invested sector contributed US$18.2 billion and the foreign invested sector, 13 US$ billion.

According to the MoIT, the import growth rate in the first four months was higher than the export grow rate, but in May, exports suddenly saw a sharp increase of 37.5 percent while imports rose by only 19 percent.

Imports by foreign-invested businesses saw a bigger increase than those of domestic businesses but the situation is expected to improve in the future.

In addition, the recent increase in the import of materials shows that production and export are on an upward trend.

Exports expected to meet targets

According to the MoIT, it is likely that export will meet the annual target if Vietnam can maintain the indexes reached in May.

However, according to associations, and exported businesses, there are still difficulties relating to the soaring material prices.

Apart from the shortage of unskilled workers in aquatic production, textiles and garments, and leather, businesses still find it difficult to access loans. These problems may negatively affect production and exports if no a suitable solution is put in place.