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Vietnam’s export levels bear little impact from European debt crisis
Experts believe the debt crisis in Europe has had an impact on Vietnam, but that the scope of this impact is not particularly sizeable.
According to trade experts under the Ministry of Industry and Trade, the impact of the debts crisis in Europe is not all that significant because the Vietnamese dong is still unconvertible and because Vietnamese export goods are mainly paid for with the US dollar.
The weakening dollar, of course, has led to a reduction of Vietnam’s exports to the euro zone. However, currently, European countries consume only 15 percent of Vietnam’s total exports. Saigon-based tiep thi newspaper has quoted its sources as saying that if exports to the European countries fall by 20 percent, Vietnam’s total exports will reduce by just three percent.
“In general, the debt crisis in the euro zone will have only a little impact on Vietnam’s exports, because Vietnam’s main export product items are farm, forestry and seafood products, which always have stable consumption levels,” said an expert from the Industry and Trade Information Centre, the arm of the Ministry of Industry and Trade.
In fact, Vietnam’s export turnover to EU countries saw a relatively low growth rate in the first months of the year, while exports to other countries decreased slightly. For example, in the first four months of 2010, the UK imported £358.42 million worth of products from Vietnam, a decrease of 0.07 percent in comparison with the same period of 2009. However, Vietnam could still maintain the growth in the export of some products, such as garments (Which grew by 13.5 percent), wooden furniture (+ 7 percent), coffee (+ 4.2 percent), seafood (+ 16.6 percent), cashews (+ 9.9 percent), handbags and briefcases (+ 15.9 percent)
In the German market, the Business Transaction Division under Vietnamese Embassy in Germany predicted Vietnam’s export revenue to the country in 2010 will only see a modest increase of five percent in comparison with 2009. Meanwhile, in 2009, exports to Germany decreased by nine percent from 2008.
The export of products which are not articles of daily necessity such as steel, wooden furniture and footwear are believed to be suffering most from the crisis, because European citizens now have to tighten their belts in the context of the far-reaching debt crisis. The export of footwear products is a typical example. In the first four months of the year, export revenue of products to the EU was just $457 million, a sharp decrease of 24.9 percent from the same period last year.
Saigon tiep thi quoted some trade counselors to EU countries as saying that Vietnam, in order to boost exports to the EU, needs to step up the export of necessities such as farm, forestry, seafood products and processed food. Vietnamese export companies have also been advised to continue using the dollar as their payment currency in order to avoid the negative impact of the depreciation of the euro.
vietnamnet, SGTT
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