Farmers harvest tea in the Central Highlands province of Lam Dong, which supplies significant quantities of the beverage to the world. The nation's trade deficit has narrowed thanks to export growth holding steady. — Photon baolamdong

The deficit rose to $722 million in the second quarter after a $481 million surplus was recorded in the first quarter.

GSO Trade Department Director Le Thi Minh Thuy said the deficit contraction was thanks to high export growth which had held steady at 15-16 per cent so far this year – significantly higher than the 10 per cent quota targeted by the Government.

In the first 11 months, export revenue reached $121.23 billion, up 16.2 per cent over the same period last year; and import turnover was about $121.12 billion, a year-on-year increase of 16.5 per cent.

Seventeen major export products – including garments and textiles, footwear, seafood and timber products – reached revenues exceeding $1.5 billion.

Telephones and components hit $20.24 billion, up 78.4 per cent, while computers, electronic products and components reached nearly $10 billion, increasing 41.6 per cent.

Foreign direct investment (FDI) businesses dominated trade activities compared with domestic firms, according to the office.

FDI enterprises represented over two thirds of total export revenue with a growth rate of 23.5 per cent, while local firms accounted for below a third, growing only 3.6 per cent.

Foreign companies also made up more than half of total import value, with a growth rate of 26 per cent, far exceeding local firms at 6 per cent.

"The FDI sector has a trade surplus while the domestic sector is in a deficit," the GSO report said.

"This reflects low export growth among domestic firms and also shows that the nation's imports were mainly used by FDI businesses to make products for export." — VNS