As of the end of Q1 2024, computers and electronics led the industry  with the highest export turnover of US$15.7 billion, up 30.3% from 2023

Strong export growth: Catalyzing breakthrough momentum

In Q1 2024, the estimated merchandise export turnover reached US$93.06 billion, marking a 17% increase compared to the same period in the previous year. The domestic economic sector contributed US$25.21 billion, up 26.2%, and accounted for 27.1% of the total export turnover. The foreign-invested sector, inclusive of crude oil, reached US$67.85 billion, up 13.9%, and accounted for 72.9% of the total. Notably, the growth rate of export turnover from the domestic enterprise sector was nearly double that of the foreign-invested enterprise sector.

It is significant to note that there were 16 items each with an export turnover surpassing US$1 billion, collectively accounting for 82.1% of the total export turnover. Furthermore, within this group, four items each boasted an export turnover exceeding US$5 billion, contributing to 52.7% of the total. This represents an increase of two items when compared to the same period in the preceding year.

In Q1 2024, exports grew robustly and uniformly across all three product groups. The agricultural, forestry, and fishery product group reached an estimated US$9.9 billion, up 26.1% over the same period in 2023, and accounted for 10.6% of the country’s total export turnover. Several products within this group saw a high export turnover compared to the same period last year, including coffee (up 54.2%), rice (up 40%), tea (up27.2%), vegetables and fruits (up 25.8%), cassava and cassava products (up 21.1%), cashew nuts (up 20.5%), and wood and wood products (up 18.9%).

The industrial and processing products group is estimated to reach US$82.02 billion, representing 88.1% of total export turnover and marking a 16.1% increase over the same period in 2023. Several sub-groups of processed industrial products have experienced high export growth, including plastic products (131.9%), cameras, camcorders and accessories (up 69.5%), chemical products (up 41.9%), plastic raw materials (up 38.9%), iron and steel (up 32.7%), electronics, computers and components (up 30.3%), chemicals (up 25.2%), and crude oil (up 24.5%).

The export of mineral fuel products in Q1 2024 is projected to reach US$1.18 billion, a 10.8% increase over the same period in 2023.

In addition to the growth of product groups, Q1 the year has seen a strong recovery and high growth in export turnover to most major markets and trading partners. The United States remains Vietnam’s largest export market with an estimated turnover of US$26.2 billion, accounting for 28.2% of the country’s total export turnover and marking a 26% increase over the same period last year. Other significant markets include China (estimated at US$12.7 billion, up 5.2%), the EU (estimated at US$12.1 billion, up 16.3%), ASEAN (estimated at US$8.9 billion, up 9.5%), Korea (estimated at US$6.6 billion, up 12.9%), and Japan (estimated at US$5.7 billion, an increase of 6.4%).

Imports show signs of recovery

The import turnover of goods is projected to reach US$84.98 billion, marking a 13.9% increase compared to the same period in the previous year, down 15.4%. The domestic economic sector is expected to reach US$29.7 billion, up by 14.4%, while the foreign investment sector is anticipated to reach US$55.28 billion, an increase of 13.6%.

In this quarter, there are 17 imported products each valued over US$1 billion, collectively accounting for 76.1% of the total import turnover. Notably, two imported goods are valued over US$10 billion: electronics, computers and components, reaching US$23.9 billion (a 23.6% increase, accounting for 28.2% of total import turnover), and other machinery, equipment, tools and spare parts, reaching US$10.3 billion (a 12.1% increase, accounting for 12.1% of the total).

In Q1 2024, production materials imports rose significantly, indicating a focus on production recovery. These imports, valued at US$79.9 billion, made up 94% of total imports. Key increases were seen in tobacco raw materials (211.8%), fertilizer (54.4%), and coal (36.9%), among others.

All of Vietnam’s main import markets saw an increase in Q1 2024. China remains Vietnam’s largest import market with an estimated turnover of US$29.4 billion, accounting for 34.6% of the country’s total export turnover and marking a 24.4% increase over the same period last year. Other significant markets include Korea (estimated at US$12.8 billion, up 4.3%), ASEAN (estimated at US$11.1 billion, up 9.8%), Japan (estimated at US$5.6 billion, up 6.8%), the EU (estimated at US$3.9 billion, up 17.3%), and the United States (estimated at US$3.5 billion, up 14.8%).

In Q1 2024, Vietnam’s textile exports reached an impressive peak of US$9.5 billion, marking a significant year-over-year increase of 9.62%

Continuing to closely monitor market developments

Despite the positive outcomes achieved in the first months of 2023, the General Statistics Office forecast that Vietnam’s import and export activities in 2024, particularly exports to key markets such as Europe and America, will face a mix of opportunities and challenges.

On the positive side, Free Trade Agreements (FTAs) continue to exert a beneficial influence, preserving Vietnam’s competitive edge in trade and investment activities. Concurrently, the global market demand, especially in the European and American regions, is gradually recovering as inflation has started to decline from the end of 2023 and is projected to approach the target level set by the Central Banks for 2024 (ECB and FED – 2%). Moreover, the ongoing strategies of industrialized nations to diversify supply sources, supply chains, and investments are likely to position Vietnam as an important production and export hub in the global value chain.

However, the global economy is transitioning into a new phase fraught with unpredictable risks and challenges. Economic growth worldwide and in European-American countries in 2024 is predicted to be lower than in 2023. Geopolitical conflicts persist, and instability continues to pose a risk of spreading to other regions. The trend of deglobalization is intensifying, and protectionist policies of countries are on the rise.

Additionally, developed countries are increasingly focusing on sustainable development issues, combating climate change, and consumer safety. These concerns continue to lay the groundwork for the establishment of new standards and regulations related to supply chains, raw materials, labor, and stricter environmental requirements for imported products.

The strategy of countries to diversify their supply sources away from China, focusing on partners near the market and partners equivalent to Vietnam such as Turkey, Mexico, India, Indonesia, Bangladesh, will pose a challenge for Vietnam.

Given this analysis, the General Statistics Office recommended ministries and branches maintain a close watch on the situation to respond promptly to potential difficulties and challenges, such as high interest rates and loan rates that have not been reduced in proportion to the mobilization interest rate; export markets have recovered but are not sustainable.

It is important to closely monitor market developments and changes in partners’ policies to propose suitable solutions and develop a diverse range of traditional and new export markets. It is also necessary to keep industry associations informed about developments in export markets so that businesses can adjust their production plans and orient themselves to seek orders from markets promptly.

The Vietnam trade office system in market areas should be directed to regularly update information on foreign market situations. Regulations, standards, and conditions of foreign markets can impact Vietnam’s import and export activities, and recommendations should be made for localities, associations, and import-export businesses.

Currently, in addition to 16 FTAs, Vietnam is negotiating three additional FTAs, which include FTAs between Vietnam and the EFTA countries (comprising Switzerland, Norway, Iceland, Liechtenstein); the FTA negotiation framework between ASEAN and Canada, and the FTA between Vietnam and the UAE, which is currently in the stage of trying to conclude negotiations early. Therefore, it is essential to effectively exploit existing FTAs to accelerate negotiations and sign new FTAs and economic linkages to diversify markets, supply chains, and promote exports.n