Vietnam’s foreign trade is showing strong growth momentum and is poised to set a new record. According to the latest data, if the current upward trend continues, the total foreign trade in 2024 is likely to surpass the historical high of $732 billion set in 2022.
In recent months, Vietnam’s foreign trade performance has been particularly impressive. Both July and August saw monthly import-export values exceeding $70 billion, a rare occurrence throughout 2022. Specifically, the total import-export value for July was estimated at $70.11 billion, while August reached $70.65 billion, demonstrating robust growth momentum.
On the export front, August set a new monthly record of $37.59 billion, up from July’s $36.24 billion. This growth is primarily attributed to the recovery in consumer demand in Vietnam’s major export markets. Looking at the first eight months of 2023, Vietnam’s total exports have already exceeded $265 billion, a year-on-year increase of 15.8%, showcasing the country’s strong foreign trade capabilities.
Imports have risen in tandem with export growth. In the first eight months of 2024, Vietnam’s total imports reached $246 billion, an increase of 17.7% compared to the same period last year. Of this, imports of production materials supporting the export manufacturing sector amounted to $230.95 billion, accounting for 93.9% of total imports, while consumer goods imports stood at $15 billion, making up 6.1%. This import structure reflects Vietnam’s efforts to strengthen its manufacturing base in preparation for sustained export growth.
Notably, during this period, Vietnam achieved a trade surplus of $19.07 billion, not only reflecting the competitiveness of Vietnamese products in international markets but also providing significant support for the national economy.
Lê Quốc Phương, former Deputy Director of the Vietnam Industry and Trade Information Center at the Ministry of Industry and Trade, pointed out that foreign trade performance, along with industrial production, has been one of the brightest spots in Vietnam’s economic landscape for the first eight months of the year. Particularly noteworthy is that industrial products account for over 88% of the export structure, while agricultural products and minerals make up only 12%, indicating that Vietnam’s industrial structure is transitioning towards higher value-added production.
In the manufacturing sector, the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) reached 52.4 points in August, indicating a strong improvement in business conditions in the middle of the third quarter. Output and new orders continued to increase, while inflationary pressures eased, creating favorable conditions for sustained growth in manufacturing.
Currently, at the peak of year-end orders, many domestic manufacturers are actively seeking orders. Companies that have already secured sufficient orders are increasing raw material purchases and hiring workers to ensure timely order fulfillment. Cao Hữu Hiếu, General Director of the Vietnam National Textile and Garment Group (Vinatex), stated that the group has secured enough orders to guarantee production for the third and fourth quarters of this year.
The textile and garment industry, a crucial export sector for Vietnam, saw total exports of approximately $28.5 billion in the first eight months. Of this, textile and garment product exports reached $24.3 billion, a 7.9% year-on-year increase; fiber and yarn exports totaled $2.92 billion, up 1.3%; and material exports neared $1.2 billion, an increase of 11.9%. Industry insiders predict that the sector’s export growth could reach 8% to 10% for the full year.
Andrew Harker, Economics Director at S&P Global Market Intelligence, believes that the easing of inflationary pressures is a crucial factor in promoting continued growth in new orders. In August, the rate of increase for both input costs and output prices slowed significantly, creating favorable conditions for the manufacturing sector to maintain strong momentum in the second half of the year.
Based on the current order situation and the growth trend in raw material imports, industry experts generally believe that Vietnam’s total foreign trade in 2024 is likely to exceed the 2022 record. If the monthly import-export value of $70 billion can be maintained, the annual foreign trade total could surpass $790 billion. Even if some sectors perform below expectations, the total foreign trade for the year is still expected to reach between $785 billion and $786 billion.
This potential new record not only reflects the resilience of Vietnam’s economy but also demonstrates its increasingly important position in global supply chains. The economic reforms and international trade agreements actively promoted by the Vietnamese government in recent years, such as the Regional Comprehensive Economic Partnership (RCEP) and the EU-Vietnam Free Trade Agreement (EVFTA), have provided strong support for the rapid growth of Vietnam’s foreign trade.
However, despite the optimistic outlook, global economic uncertainties remain. Factors such as geopolitical tensions, global inflationary pressures, and monetary policy adjustments in major economies could pose challenges to Vietnam’s foreign trade development. Therefore, the Vietnamese government and businesses need to remain vigilant, continue to optimize the industrial structure, and improve product quality and added value to enhance competitiveness in international markets.
Key points:
- Vietnam’s foreign trade performance in the first eight months of 2024 has been strong, poised to break the 2022 record of $732 billion.
- Monthly import-export values in July and August both exceeded $70 billion, with August exports hitting a new high of $37.59 billion.
- Total exports in the first eight months exceeded $265 billion, a year-on-year increase of 15.8%; total imports reached $246 billion, up 17.7%.
- Industrial products account for over 88% of exports, indicating a shift towards higher value-added production in the industrial structure.
- Manufacturing PMI remains in the expansion zone, with continued growth in new orders and easing inflationary pressures.
- Key industries like textiles and garments have sufficient orders, with full-year growth expected at 8-10%.
- Total foreign trade for 2024 is projected to reach between $785 billion and $790 billion.
