Following a positive growth of 6.5% year-on-year in 2020, exports are expected to remain the economy’s main growth driver for this year.

Cargo handling at Saigon port. Photo: Hoang Hai.

“A diversified network of export markets helps Vietnam offset losses from decline in export volume to traditional markets such as the EU or ASEAN,” said economist Nguyen Xuan Thanh, a member of the Prime Minister's Economic Advisory Group.

“However, Vietnam’s exports to the US would face more difficulties in 2021, given the country’s trade surplus of US$62.7 billion last year,” noted Mr. Thanh, but saying new trade deals such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP) would be a boost for the country’s trading outlook.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that the Ministry of Industry and Trade (MoIT) should play a more active role during the enforcement of free trade agreements that Vietnam is a member of. This includes trade promotion activities in potential markets; enhancing state management to combat trade and origin frauds; improving efficiency in dealing with trade disputes and protecting domestic production as well as applying IT in trade and promoting e-commerce.

In 2020, Vietnam reported an all-time high trade surplus of US$19.1 billion, far exceeding the record figure of $10.9 billion in the previous year. Overall, Vietnam's trade turnover is likely to have increased by 5.1% year-on-year to reach $543.9 billion in 2020, of which its export value is estimated at $281.5 billion, up 6.5% year-on-year, and imports at $262.4 billion, up 3.6%.

While many voiced concerns that the government’s GDP target of 6.5% in 2021 remains ambitious, experts suggested this is entirely feasible thanks to three main contributors comprising resilience of the business community, the active role of the government in administrative reform and improving the business environment, and the comprehensive development of human resources with the support of sciences, technology and innovation.

“The year of 2021 is the first of a new decade and the first of a 10-year economic cycle, which is opening many opportunities for the Vietnam’s economy and the business sector,” said VinaCapital’s Managing Director Andy Ho.