Prolonged Covid-19 epidemic takes its toll on Vietnam export growth target in 2020

Prolonged Covid-19 epidemic to take toll on Vietnam export growth target in 2020

Hai Yen 11:33, 2020/03/10

The spreading of Covid-19 epidemic in Vietnam’s major trade partners including Japan and South Korea are causing problem for export-import activities.

A lingering Covid-19 epidemic could take heavy toll on Vietnam’s export growth target for 2020, according to the Ministry of Industry and Trade (MoIT).

Data: MoIT. Chart: Hai Yen.

Meanwhile, in the short term, the spreading of Covid-19 epidemic outside China, especially in Vietnam’s major trade partners including Japan and South Korea, is putting pressure on the country’s external trade.

According to the MoIT, the majority of input materials for domestic production in Vietnam, particularly in the fields of electronic products, textile and garment, are sourced from China.

The US decision not to treat Vietnam as a developing country is expected to hit on Vietnam’s exports to this market, said the MoIT’s report.

In the first two months of 2020, Vietnam had seven categories of goods and products with export turnover topping US$1 billion each, all in the manufacturing and processing sector. They are wood products; textile and garment; footwear; electronics, computers and parts; phones and parts; machinery, equipment and parts; and transportation vehicles.

Notably, computers, electronics and parts recorded the highest export growth of 26.7% year-on-year among Vietnam’s key export staples during the period, standing at US$5.36 billion, followed by machinery, equipment and parts with US$2.98 billion, up 19.6%.

Overall, export turnover of Vietnam’s industrial products climbed 4.1% year-on-year in the two-month period to US$31.39 billion, accounting for 85.01% of total exports.

In February, exports of phones and parts surged 55.8% against the previous month to US$4.2 billion, mainly thanks to Samsung’s exports of Galaxy S20, S20+ and S20 Ultra, three newly released smartphones.

Exports of agro-fishery-forestry products in the January – February period stood at US$3.03 billion, down 14% year-on-year. The MoIT said such a decline was due to disruption of exports to China, a key market for Vietnam’s agricultural products. The export revenue of agro-fishery-forestry products in February decreased by 15.1% month-on-month.

In 2019, for the first time Vietnam’s trade turnover exceeded the US$500-billion mark to nearly US$517 billion, up 8% year-on-year, and earned a trade surplus of nearly US$10 billion. Of the total trade revenue, exports stood at US$263.5 billion, up 8% year-on-year.

Prime Minister Nguyen Xuan Phuc at a government meeting on December 30, 2019, expected Vietnam to reach export value to grow 13.8% year-on-year to reach US$300 billion in 2020 and extend the trade surplus status to a fifth consecutive year.