In July 2022, Vietnam's export value decreased by 7.7% mom (8.9% yoy) to around US$30.3 billion. 

>> Export enterprises struggle in cost storm

The General Statistics Office of Vietnam (GSO) reports that in July 2022, Vietnam's export value decreased by 7.7% mom (8.9% yoy) to around US$30.3 billion. Vietnam's export value increased to US$216.4 billion for 7M22 (16.1% yoy).

The annual growth rate of exports in July was less than the rates of 20.7% yoy reported in the month before and 17.3% in the first six months of this year. Goods including wood and products (-3.5% yoy), textile fibers (-34.8% yoy), iron and steel products (-34.7% yoy), plastic materials (-26.9% yoy), clinker and cement (-29.8% yoy), and furniture made of non-wood materials (-10.9% yoy) all experienced declines in July 2022.

On the plus side, a number of export commodities continued to experience rapid growth in July. These commodities include crude oil (124.3% yoy), chemicals (60.8% yoy), chemical products (53.0% yoy), footwear (65.6%yoy), toys & sports equipment (77.5% yoy), electric wires and cables (30.8% yoy), and machinery & equipment (26.1% yoy).

>> Rising inflation causing concern for export businesses

Mr. Dinh Quang Hinh, an analyst at VNDirect, maintains his position that the world economy's development prospects could be dampened by tighter global financial conditions and supply chain disruptions, which would reduce demand for Vietnam's exports in the second half of 22. The world's largest economy, the US, saw its GDP decline by 0.9% in 2Q22, the second consecutive quarter, reflecting the slowing of global economic growth. Rising interest rates caused the property market to collapse, while high inflation slowed down company and consumer spending.

Other significant trading partners of Vietnam, including China and Europe, are expected to see weak economic development in 2022. In order to take into consideration the economic repercussions of the Russia-Ukraine crisis and tighter global financial conditions, the majority of research organizations have decreased their projections for global economic growth for 2022F by 0.5-0.9% points. Therefore, Mr. Dinh Quang Hinh anticipates a slowdown in export growth in the second half of 2022, with a final 2022 export growth rate of 14%.

In terms of imports, Vietnam spent $30.3 billion USD (-6.0% mum, 3.4% yoy) on imports in July. A decrease in import activity may indicate a downturn in industrial production in the upcoming months.

Petroleum products (109.6% yoy), fishery (71.6% yoy), coal (67.6% yoy), glass and glass products (56.8% yoy), and other basic metals ( 29.1% yoy) were among the imports to Vietnam that saw the fastest growth rates in 7M22. Contrarily, the import turnover of commodities such as iron and steel scrap (-66.2% yoy), iron & steel (-9.1% yoy), phones of all types and their parts (-8.4% yoy), and machinery and instruments (-9.1% yoy) decreased in July.

In July, Vietnam's trade balance showed a surplus of US$21 million. Vietnam's trade surplus for 7M22 was US$0.8 billion, an improvement over the US$3.3 billion trade deficit for 7M21. Mr. Dinh Quang Hinh anticipates that Vietnam's trade surplus for the entire year of 2022 will increase from US$3.3 billion last year to US$7.2 billion.