Vietnam’s exports to foreign markets have suffered a dramatic downturn since April as a result of the negative economic impact caused by the novel coronavirus (COVID-19) pandemic, after recording positive growth throughout the first quarter of the year, according to the Ministry of Industry and Trade.
|Plummeting exports hit hard by COVID-19 impact during first half of May
The country bagged an estimated US$8.22 billion from exports during the first half of May, the lowest level of revenue since the start of the year. Meanwhile, its import turnover reached approximately US$9.2 billion, resulting in a trade deficit of roughly US$1 billion throughout the reviewed period.According to a statement made by the Ministry of Industry and Trade, with the COVID-19 epidemic spreading globally since mid-March, global supply chains have been severely disrupted, therefore significantly affecting the country’s export-import activities.
With trade activities since April being greatly impacted as a result of the COVID-19 pandemic, the negative trend is anticipated to continue moving into the second quarter as some of Vietnam’s major trading partners such as the United States, the European Union, and Japan are the hardest hit and it is unlikely that they will rebound in the short-term period.
At present, the majority of importers have moved to cancel orders in April and May, while also temporarily halting negotiated orders from June onwards.
This postponement can be attributed to the fact that several countries globally have imposed lockdowns in an attempt to slow the spread of the COVID-19, leading to a shortage of raw material sources from the beginning of March that are necessary for the domestic footwear industry in addition to local garment and textile firms.
If the COVID-19 is successfully brought under control ahead in the second quarter of the year, the country’s exports are expected to bounce back during the second half of the year. This rejuvenation will offer fresh impetus to the country’s economic growth due to the recovery of global consumption demand and the competitive advantages brought about by the EU-Vietnam Free Trade Agreement (EVFTA) when it takes effect later this year.
Despite posting a trade deficit in the first half of May, Vietnam’s import-export turnover since the beginning of the year reached roughly US$177 billion, with the country enjoying a trade surplus of approximately US$1.4 billion.