Vietnam’s Economy Sees Strong Growth in the First Half of 2018 – Trade
Vietnam’s economy expanded by 7.08 percent in the first six months of 2018, the highest in eight years, primarily driven by the growth in services and industry-construction sectors. In addition, exports and foreign direct investment (FDI) also witnessed higher growth in the first half of 2018 (H1), compared to the same period last year. In spite of a forecast of a slowdown in the second half of the year, the government is confident of achieving its annual target of 6.7 percent.
Trade
Exports
Exports in the first half of 2018 grew by 16 percent, compared to the same period last year, to US$113.93 billion. Domestic sector exports grew by 19.9 percent to US$ 33.07 billion, accounting for 29 percent of the overall exports.
The FDI sector exports grew by 14.5 percent compared to the same period in 2017 and reached US$ 80.86 billion, accounting for 71 percent of the total exports.
Mobile phones and spare parts accounted for the highest share at US$22.5 billion, up 15.4 percent, while garments and textile grew by 13.8 percent to US$13.42 billion. Computers, electronic products, and components exports grew by 15.7 percent to US$13.45 billion.
Imports
Overall H1 imports increased by 10 percent to US$111.22 billion, leading to a US$2.7 billion surplus. Imports by the domestic sector grew by 12.9 percent to US$46.01 billion, while imports for the FDI sector grew by 8.1 percent to US$65.21 billion.
Imports of computers, electronic goods, and spare parts grew by 14.3 percent, to US$19.7 billion, while machinery, equipment, and components imports reached US$16.15 billion, down 7.3 percent. Imports of mobile phones and spare parts also reduced by 4.4 percent, to US$5.97 billion, while fabric imports grew by 17.1 percent to US$6.43 billion.
Surplus
This year, Vietnam had a trade surplus of US$2.71 billion in the first six months, with the domestic sector posting a deficit of US$12.94 billion, and the FDI sector recording a surplus of US$15.65 billion. This highlights the importance of the FDI sector in the economy and the low competitiveness of domestic firms.
Services exports/imports
Exports of services from January to June 2018 reached US$7.5 billion, growing by 16.4 percent compared to last year. Travel service exports accounted for the majority at US$5.2 billion, growing by 18.9 percent, while transportation service exports grew by 11.8 percent to US$1.4 billion.
Service import turnover grew by 6.5 percent to US$8.8 billion, leading to a trade deficit of US$1.3 billion. Transportation services accounted for almost half, at US$4.2 billion, growing by 7.5 percent. Travel services grew faster at 9.4 percent to US$2.7 billion.
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