Vietnam ran up a US$2.4 trade deficit in the first three months of this year, a 340 percent drop from a trade surplus worth around $1 billion in same period of last year, according to data released Friday last week by the Vietnam Customs and the General Statistics Office of Vietnam.

The trade deficit in the first quarter tended to increase gradually with $361 million in January alone and $1.21 billion in January-February, as import grew faster than export, the Vietnam Customs said.

While total exports reached $36.3 billion, up 8.8 percent year on year, imports earned $38.7 billion dollars, surging 20.1 percent over the same period last year.

In particular, the total export and import turnovers of foreign-invested enterprises (FIEs) topped $48 billion, up 22.6 percent year on year, or $8.9 billion, compared to the data in the first three months of 2014.

The earnings of FIEs accounted for 64 percent of the total export and import revenues of the country, according to the latest statistics from the Vietnam Customs.

Once considered the strength of local exporters, crude oil and agricultural commodities including coffee and seafood decreased 10-15 percent compared to the first quarter of last year due to price and export volume falls.

Meanwhile, six key export groups saw a significant increase with the shipments of telephones and accessories topping the list at $6.7 billion, followed by garments and textiles ($4.9 billion) and computers and accessories ($3.6 billion).

Topping the group of imported products in the first quarter was machinery and equipment with $7 billion, up 45.8 percent, or $2.2 billion, in comparison with the figure in the same period last year.

It was followed by the group of computers and components with $5.6 billion, up 34 percent year on year.

The trade deficit was mentioned as a rising concern for the national economy in a meeting between the ministries of finance, planning-investment, industry-trade, and the State Bank of Vietnam on macroeconomic management in Hanoi on Thursday last week.

These bodies had had access to the latest statistics before they were unveiled by the Vietnam Customs and General Statistics Office of Vietnam.

However, Bui Quang Vinh, Minister of Planning and Investment, said that it is not a sign to be worried about as the trade deficit was caused by the importation of machinery and equipment for production, which can be seen as a good sign for the economy.

Rising dependence on FIEs, Chinese market

FIEs earned $24.53 billion in export revenue in the first quarter, up 18.7 percent year on year, while spending $23.66 billion on imports, a 27.1 percent annualized rise.

Thus, FIEs brought in an $870 million trade surplus during the period, down 78 percent compared to the $3.9 billion trade surplus recorded in the same period last year.

Meanwhile, local firms saw a trade deficit of $3.8 billion, a 31 percent year-on-year surge compared to $2.9 billion in Q1/2014.

As reported by the Vietnam Customs, China continued to be the largest export market of Vietnam in Q1/2015 with $11.47 billion, while importing $3.54 billion worth of Vietnamese goods, resulting in a trade deficit of about $8 billion for the Southeast Asian country.

Goods mainly imported from China during the period were machinery, equipment, tools, spare parts, computers and components, telephones and accessories, and steel with double-digit growth rates in import values, the Vietnam Customs said.

Within the ASEAN region, Vietnam also ran a trade deficit of $1.3 billion, as shipments raked in only $4.5 billion while imports hit $5.8 billion.

However, Vietnam had a huge surplus with the U.S. and the EU markets during first quarter of 2015, with $5.3 billion and $4.7 billion, respectively, up 17 percent and 14.2 percent compared with the same period last year.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!