Vietnam's trade deficit hits $20.52 bln in Jan-Jul

KUALA LUMPUR, 10 AUGUST 2026 —

Vietnam’s merchandise trade deficit widened to $20.52 billion in the first seven months of 2026, the National Statistics Office said.

Total trade surged 28.1% year-on-year to $659.58 billion, with exports up 21.7% at $319.53 billion and imports climbing 34.8% to $340.05 billion.

The July deficit alone reached $3.59 billion, following $5.21 billion in May and $2.64 billion in June, the NSO said.

Economists attributed the gap to rising demand for production inputs, machinery and equipment. More than 94% of imports were raw materials and components for manufacturing, according to Pham Anh Tuan at the Institute of Vietnam and World Economy.

Foreign-invested enterprises accounted for $255.89 billion of exports in the period, or over 80% of the total, while importing $247.91 billion. Domestic firms exported $63.64 billion but imported $92.14 billion, leaving a $28.5 billion deficit.

Can Van Luc, chief economist at BIDV, said the deficit reflects resilient manufacturing demand rather than economic weakness. “Companies are importing more raw materials and components to secure supplies amid continued global uncertainty and to prepare for stronger production in the second half of the year,” he said.

The dong has remained stable despite the gap. The average U.S. Dollar Index stood at 100.81 by July 25, up 0.76 points from June, the NSO said.

Nguyen The Minh, head of investment banking at An Binh Securities, said the deficit is cyclical. Businesses typically increase imports early in the year to fulfill export orders later on. If those inputs are converted into finished goods and shipped out, the trade balance could improve in the second half.

A positive interest-rate gap—higher dong rates than dollar rates—also reduces pressure on the exchange rate, he said. Other inflows, including foreign direct investment, remittances and tourism, help finance imports.

Foreign reserves stood at 1.9–2 months of imports at the end of June, below the IMF’s recommended minimum of three months, the NSO said.

Pham Anh Tuan warned that reserves act as a shock absorber for exchange-rate swings and capital flight. “A trade deficit is not inherently problematic if the imported goods are turned into exports,” he said. “Risks rise when imports grow without matching increases in output, export orders or domestic value added.”

Behind the headline numbers, the FDI sector dominates high-tech exports such as electronics, computers and phones, but most components and machinery are imported. Domestic firms supply about 20% of exports, mostly low-value goods, while running persistent deficits.

Unless Vietnam lifts its localization rate, rapid export growth may not translate into higher domestic value added, analysts said.

Vietnam’s trade remains strong, with manufactured goods accounting for more than 90% of exports and several categories scaling rapidly. A more balanced model will require stronger supporting industries, deeper linkages between local firms and multinationals, and faster technological upgrading.

For now, the $20.52 billion deficit is not flashing red, provided imported materials keep feeding factories that ship finished goods abroad. The real test will be whether Vietnam can extract more value from each dollar of exports—or whether the gap widens into a structural dependency.

Related: Ministry of Finance