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High trade deficit recorded over five months nothing to worry about

23/06/2021    13

Vietnam’s export industries posting a trade deficit over the opening five months of the year is not a worrying sign as most imported items are raw materials necessary for production, especially for the group of export goods, according to industry insiders.

Over the past five months local businesses have accelerated their import of electronic components, raw materials and accessories for leather and footwear, textiles, electronics, machinery, tools and spare parts, phones and accessories, plastics, and farm produce as a means of boosting production activities.

May alone saw Vietnam record a trade deficit of more than US$2 billion, thereby making the trade balance during the reviewed period reverse after a long period of securing a trade surplus. Meanwhile, the import turnover of goods surged by 36.4% to US$131.31 billion compared to the same period from last year.

Most notably, the sharp increase in imported goods mainly came from foreign-invested businesses, with turnover reaching US$85.5 billion, an increase of 39.9% compared to last year’s corresponding period.

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), attributed the recent rise in imported raw materials and accessories to the recovery of the garment and textile industry. Indeed, export turnover increased by up to 15% throughout the reviewed period.

In addition, the increase in import of production materials, especially electronics, high-tech items, and machinery and equipment is anticipated to create greater opportunities for businesses to boost their exports in the near future.

Dang Hoang Giang, general secretary of the Vietnam Cashew Association (VINACAS), said that the import of raw cashew nuts also skyrocketed during the five-month period. The total imported volume of raw cashew from Cambodia soared by more than 500% in value whilst also exceeding last year’s import volume.

Source: VOV

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