“We believe that when the pandemic is controlled from now to the end of the year, the opportunities to export to the European market are huge, which means we will continue to keep an export surplus. This will significantly contribute to supporting economic growth in 2020 in the context that the Government defines exports, investment and consumption as the three main growth engines of the economy in 2020,” said by Mr. Nguyen Trung Tien (photo), Deputy Director of General Statistics Office.

How do you evaluate the record export surplus in the first nine months of 2020?

This is one of the remarkable numbers, making a great contribution to the economic growth in the first nine months of the year that we have achieved is 2.12%. This result will also affect the economic growth of the whole of 2020. The question is, under the impacts of Covid-19, why do we have a record export surplus?

We have an export surplus due to three reasons. Firstly, it is the strong growth in exports of domestic enterprises, increasing by 20.2% (compared to 16.4% of the same period in 2019).

Secondly, although the goods accounts for a large proportion and the traditional goods of Vietnam decreased due to the impact of the Covid-19 pandemic, such as the export of telephones and equipment in the first nine months of the year decreased by 5.5%, textile exports decreased by 10.3% and exports of leather and footwear decreased by 8.8%, we saw record growth in new and high value added items.

Accordingly, in the agricultural sector, in the first nine months of the year, we exported US$2.5 billion of rice. Although we are down by 0.6% in volume, we increase by 12% in value. This is one of the very good signals for Vietnamese agricultural products. As for items with high added value such as electronics, computers and components, our exports increased by 25.8%, machinery and equipment increased by 39.8%, non-wood furniture increased by 57.4%, sports tools and equipment increased by 59.5%.

Thirdly, we currently have six main export markets: the US, China, the EU, Japan, South Korea and ASEAN, we continue to maintain high growth rates in the top two markets of the US and China.

Domestic enterprises have made a great contribution to the trade surplus in the first nine months of the year. What do you think about this change?

In fact, the foreign investment sector still has a great contribution to the trade surplus. So far, the trade surplus of US$17 billion in 2020 has positively contributed from two sectors: domestic and foreign investment. In the first nine months of the year, although the export of foreign-invested enterprises decreased by 2.9%, the trade surplus increased by US$2 billion compared to the previous year. Meanwhile, the domestic business sector has made significant progress, though it still witnesses a trade deficit. Accordingly, compared to the same period in 2019, the domestic sector saw a trade deficit of US$19 billion, while in the first nine months of 2020, the trade deficit of the domestic sector was only over US$10 billion. Thus, the trade deficit of the domestic business sector this year decreased by US$9 billion compared to the same period last year. Therefore, the record export surplus of US$17 billion was due to the positive impact of both domestic and foreign economic sectors.

In recent years, we have continuously had a trade surplus and it increases year-by-year. What positive impacts will this have on the economy in general and the economy in 2020, sir?

Vietnam has signed many FTAs in recent years. When we increase the signing of FTAswith other countries, the balance of trade surplus will lean toward Vietnam. So far, 13 FTAs have taken effect, of which the most effective and the most expected EVFTA has just been signed.

Trade deficit and trade surplus are both positive and negative. For the trade deficit, if we import machinery and science and technology, we will acquire the world's advanced technologies, create high-quality products and compete with products of the country. Besides, if we import consumer goods and culture, we improve our lives.

However, a large trade deficit will lead to devotional consumption, which means we use more foreign goods than domestic ones. Moreover, it affects public debt, because when the deficit is over for a long time, we have to use a lot of foreign currencies, so the Government has to use bonds to compensate for the shortage that leads to public debt. This is also one of the reasons leading to the financial collapse in Greece in 2009.

In addition, the trade deficit has a negative impact on the financial crisis, stock market and domestic unemployment. We always want a trade surplus because it has a more positive effect, when it has a trade surplus, we will have stable exchange rates and foreign reserves. Especially in the current context, we are trying to keep the domestic currency stable for economic recovery and development when the Covid-19 pandemic ends. This is good because we need more resources to develop the economy in the post-Covid-19 context.

There is an opinion thatthe trade surplus is partly due to the decrease in imports, while the import of raw materials is essential for production. What do you think about this?

I have the opposite thought. When we have such a record export surplus, many economists ask the question: are we not able to import raw materials, so we have a trade surplus? However, this is not true.

Our trade surplus is due to the fact that the domestic business sector has actively found solutions to adapt and responded appropriately when the Covid-19 pandemic started. They took the initiative to exploit all sources of raw materials for production and export. However, so far, our industries such as garment and footwear have decreased, but the decrease is not because we cannot import raw materials, but the main reason is that, so far, the orders in other countries have not been signed. This is not a worry, because according to the numbers we have collected, we import raw materials for production reaching 93.5%, decreasing by 0.03% compared to the previous year, which means that businesses have actively exploited input materials for production.

There is data that few people notice that the first nine months of 2020, exports to Europedecreased compared to the same period (the first nine months of 2019).

This is one of the possibilities when the EVFTA came into effect. Recently we have exported some agricultural products such as coffee, rice and fruit to the EU market. We believe that when the pandemic is controlled, from now to the end of the year, the room for export to the European market is very large, which means we will continue to keep a record export surplus.

This will contribute significantly to support economic growth in 2020 in the context that the Government defines exports, investment and consumption as the three maingrowth engines of the economy.

Thank you, Sir!

Minister of Planning and Investment Nguyen Chi Dung:

In the future, it is necessary to continue to implement the Government's "dual goals" - resolutely preventing the Covid-19 pandemic, maintain macroeconomic stability and control inflation. At the same time, it is necessary to take advantage of opportunities, quickly restart production and business activities, take advantage of opportunities of the world market created by the Covid-19 pandemic.

We need strong and drastic policy mechanisms and solutions to create resilience for the whole economy, stimulating all three main growth drivers: investment, export and consumption to strive for the highest level of the targets of the socio-economic development plan 2020. By implementing these solutions synchronously and consistently, the economic growth for the whole of 2020 can reach 2-3% as stated by international organizations.

Economic expert, Head of Department of Macroeconomics, Pham The Anh National Economics University:

Vietnam is in a vulnerable group when global GDP fell sharply in the second quarter, with a decline of more than 10%, currently, the global economy begins to recover after social distancing measures are eased.

However, risks and uncertainties from the pandemic are not over, global GDP is forecast to fall 4.5% this year before rebounding at 5% in 2021 (OECD). Industrial production and exports recovered from April, but the pace of recovery slowed, while international tourism almost disappeared. It can be seen that the measures to prevent the outbreak of the pandemic have hindered the recovery of the global economy. Vietnam is in the group of vulnerable emerging economies. The reason is that the informal sector is large, the economy depends on exports, and on international tourists, the inflation rate and interest rates are still high, the health of the financial system is not stable, while the fiscal deficit and debt burden was high before the pandemic.