Vietnam July trade deficit widens, driven by higher fuel costs

HANOI: Vietnam posted a trade deficit of $3.587 billion in July, wider than June’s $2.64 billion gap, while consumer prices rose 4.45% from a year earlier, compared with 4.69% the previous month, government data showed on Monday.

Goods exports in July rose 25% from a year earlier to $53 billion, while imports climbed 41% to $56.67 billion, the National Statistics Office (NSO) said.

For the January-July period, exports increased 21.7% year-on-year to $320 billion, while imports surged 34.8% to $340 billion, resulting in a trade deficit of $20.5 billion, exceeding Vietnam’s previous full-year record trade deficit of about $18 billion in 2008.

The Southeast Asian manufacturing hub is targeting economic growth of more than 10% this year, but faces headwinds including a widening trade deficit, rising inflationary pressures and ongoing US investigations into overcapacity and possible violations of intellectual property rules.

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Vietnam is also facing a new 12.5% US tariff imposed on July 24 under a Section 301 forced labour investigation, after Washington determined that it had failed to effectively prohibit the export of goods made with forced labour, an accusation Hanoi has rejected.

Vietnam’s growing import bill has been driven in part by higher fuel costs this year. In the first seven months, crude oil imports fell 11.9% in volume but increased 18% in value.

Imports of refined fuels rose 6% in volume and 67.6% in value, according to the report. Foreign direct investment inflows in the January-July period rose 11.8% from a year earlier to $15.2 billion, the NSO said. Consumer prices in July rose 4.45% from a year earlier, down from 4.69% in June.

The government is targeting inflation of 4.5% for 2026, according to the report. Industrial production in July expanded 14.5% from a year earlier, while retail sales rose 14.5%, the NSO said.