Vietnam’s US$2-billion trade deficit in May would not be a concern as the majority of goods and products imported are for production or export.

Deputy Minister of Industry and Trade Do Thang Hai made the statement in a press conference on May 17.

Overview of the press conference. Source: MoIT

Data from the Ministry of Industry and Trade (MoIT) revealed in the first five months of this year, Vietnam’s exports surged by 31% year-on-year to US$131 billion, while imports also rose by 37% to US$131.6 billion.

A trade deficit of US$2 billion in May has resulted in a deficit of US$370 million for the five-month period, which is a stark contrast of a surplus of US$1.63 billion recorded in the January-April period.

“There is no abnormality in these figures, as up to 90% of products imported to Vietnam are input materials for production in fields of electronics, footwear, and garment,” Hai said.

According to Hai, these sectors are those that have been on a fast recovering pace as import markets are gradually containing the pandemic.

“Many garment and footwear production firms have received full orders until the third quarter or even the fourth, so high import value is inevitable,” he added.

Cargos handling at Haiphong port. Photo: Lam Khanh

Vietnam targets export growth of 4-5% year-on-year in 2021, and overseas shipments are expected to surge in the last months of the year.

“It is highly likely that the trade balance would return to positive in the coming months,” he said.

Hai, however, noted as the pandemic continues to remain serious, the industry sector would focus on pursuing the twin goal of both containing the pandemic and supporting economic growth by ensuring sufficient supply of basic necessities, balance supply-demand for products, while preventing goods hoarding and possible disruption of the supply chains.

“The ministry is pondering authorizing the resumption of production at manufacturing plants having met safety requirements against the pandemic, along with measures to boost exports, market diversification and removal of trade barriers,” he added.