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Vietnam: Exports affected by slowing global demand
HO CHI MINH CITY: Vietnam’s economic recovery remains challenged with exports being hit hard by weakening global demand, experts say.
Speaking at a meeting in Ho Chi Minh City, Industry and Trade Minister Nguyen Hong Dien said exports have steadily decreased in most industries, including garments, agriculture, forestry, fishery and wood processing.
“Local exporters have been struggling with weakening global demand as exports fell 11.9% year-on-year in the first quarter, affecting their growth targets in the next five to 10 years,” he said.
Total exports and imports were estimated at US$154.3bil (RM688bil) in the first quarter, down 13.3% year-on-year.
Exports of textiles, garments, leather and footwear, timber and seafood are among the hardest hit with the main export markets being the United States and the European Union.
Garment exports fell 8%, handicraft and woodwork exports decreased by about 15% and seafood exports dropped 27.5%.
Exports to all markets decreased in the period, of which exports to the United States dropped 19.4%; followed by the African market by 11.2%, the EU 9.7%, Asia 7.3% and Oceania 3.7%, according to Dien.
He attributed the decline to high inflation and the slowing global economy, particularly the risk of economic crisis in some of the country’s major markets, such as the United States and the EU.
Exporters are also facing a hike in raw materials for production while export prices remain unchanged, reducing the competitiveness of the products, he said. The cost of labour, packaging, and transportation have also been on the rise, he added.
With Vietnam signing a number of free trade agreements, local exporters are expected to face many technical barriers (such as rules about clean and green energy conversion as well as low carbon production), he noted.
In addition, many businesses said it was still challenging for them to access loans.
While the central bank has consistently called on banks to cut lending rates to support firms, getting loans disbursed has remained a problem for them, they said.
Nguyen Hoai Nam, deputy general-secretary of the Vietnam Association of Seafood Exporters and Producers, recommended the government have a low-interest credit package of 10 trillion dong (RM1.9bil) to support farmers and fishermen to buy raw materials to maintain production. — Viet Nam News/ANN