Vietnam Foreign Trade Continues Recovery in 2024

Vietnam’s foreign trade has continued to rebound in the first four months of 2024 following a major trade slump recorded in 2023, according to the latest data released by the General Statistics Office (GSO).

Both imports and exports witnessed significant growth as demand in key export markets ratchets up and domestic economic activity continues to recover following the COVID-19 pandemic.

Trade in April up 15 percent year-on-year

Vietnam’s import and export of goods in April 2024 reached a total of US$61.20 billion, an increase of 15 percent from the same period in 2023 and a decrease of 5.2 percent from the previous month.

Between January and April 2024, the total trade in goods reached US$238.88 billion, increasing by 15.2 percent year-on-year. Of this, total exports are estimated at US$123.64 billion, up 15 percent year-on-year, while imports are estimated at US$115.24 billion up 15.4 percent year-on-year. Vietnam’s trade surplus in goods in the first four months reached US$8.4 billion.

The high growth numbers recorded in the first four months of 2024 indicate that Vietnam is continuing to recover following a year of tumbling foreign trade. In 2023, Vietnam’s total foreign trade fell by 6.6 percent from the previous year, with exports down 4.4 year-on-year and imports 8.9 percent year-on-year. The slump in foreign trade is attributable in large part to weak demand due to high inflation in key export markets – such as the US and the EU – as well as weak domestic demand following the COVID-19 pandemic.

Trade figures began to recover in September of 2023, and have continued to accelerate steadily in the months since.

On a month-by-month basis, foreign trade decreased in April 2024. Exports, which reached a total of US$30.94 billion in April, fell by 8.1 percent from March. This is nonetheless a significant increase of 10.6 percent compared to April 2023.

Imports of goods in April reached an estimated US$30.26 billion, down 2 percent month-on-month but accelerating 19.9 percent from the same month the previous year.

Vietnam’s processing and manufacturing industry group accounted for around 87.5 percent of exports in the first four months of 2024, reaching an estimated total of US$108.27 billion. Meanwhile, the raw materials and production inputs group accounted for around 94 percent of imports in the first four months, reaching total imports of around US$108.33 billion.

Healthy growth with major trading partners

The United States continued to be Vietnam’s largest export market, with a total estimated turnover of US$34.1 billion, growing 19.1 percent from the same period in 2023. Vietnam’s trade surplus reached an estimated US$29.6 billion, up 21.6 percent over the same period last year. Vietnam’s second-largest export market is China, with exports reaching US$18 billion, up 14.4 percent year-on-year.

The EU is another major export market, absorbing US$16.4 billion in exports between January and April 2024, up 15 percent year-on-year. Vietnam’s trade surplus with the EU stood at an estimated US$11.4 billion in this period, an increase of 16.7 percent year-on-year.

Meanwhile, China remained Vietnam’s top source of imports, with total imports from with reaching US$41.6 billion, soaring 28.4 percent year-on-year. Vietnam’s trade deficit with China reached US$23.6 billion in the first four months of 2024, up 41.4 percent from the previous year.

Vietnam’s top-traded goods accelerate

Several export goods saw a strong recovery in the first four months of 2024, with 21 items recording a turnover of over US$1 billion. These goods accounted for around 86.4 percent of total exports. Meanwhile, the top five export goods with a turnover of over US$5 billion, shown in the table below, accounted for 57.8 percent of total exports.

Exports of Vietnam’s top export product by value, electronics, computers, and components, increased by 34.9 percent year-on-year in the first four months.

In the first four months of 2024, 20 import products with a value of over US$1 billion accounted for 78.9 percent of total imports, while just two import products, listed in the table below, had a value of over US$5 billion, accounting for 39.4 percent of total imports.

Vietnam’s foreign trade outlook in 2024

The uptick in Vietnam’s foreign trade is thanks in large part to key export markets getting inflation under control, enabling more spending on Vietnamese products. At the same time, Vietnam’s free trade agreements (FTAs) with these export markets – notably the EU-Vietnam Free Trade Agreement (EVFTA) – may be beginning to take effect, and could continue to fuel Vietnam’s exports in the coming months.

Moreover, the push to diversify supply chains away from China among Western companies in particular may continue to benefit Vietnam’s manufacturing export sector and fuel the country’s long-term economic development.

Nonetheless, Vietnam’s foreign trade remains vulnerable to external shock factors, and key export markets may yet encounter challenges such as geopolitical tensions or unforeseen economic downturns. Additionally, fluctuations in global commodity prices, especially in sectors where Vietnam is heavily reliant, such as electronics and textiles, could impact the country’s export performance.

While Vietnam’s foreign trade has shown promising signs of recovery in the first four months of 2024, maintaining this momentum will require continued efforts to diversify markets, enhance competitiveness, and adapt to changing global trade dynamics.

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