Vietnam’s current account surplus is forecast to be 6.2% of GDP this year and will contract over the coming decade.

This is according to a recent report from international financial data provider Fitch Solutions, who said the surplus is slightly less than 2020’s 6.6% estimate.

“Improved market access from EU-Vietnam Free Trade Agreements (FTAs), UK-Vietnam FTAs, comprehensive and progressive Trans-Pacific partnerships, and regional comprehensive economic partnerships expand Vietnam’s commodity trade surplus. However, the urgent need to develop transportation and logistics infrastructure in Vietnam, which tends to involve a lot of foreign consultants and other services, will exacerbate the shortage of services. 

“In addition, foreign-affiliated companies and increasing corporate profits sent abroad will increase the primary income deficit over time, as companies are a major driver of export growth,” the report stated.

“From a structural point of view, as the outward sector develops and the middle class grows in Vietnam, and as domestic investment opportunities increase, the excess of investment savings narrows and the current account surplus decreases in the long run.”

Vietnam’s continued current account surplus is controlled by the commodity trade surplus, which is set to gradually grow in line with the global economy, coupled with rising remittances from overseas Vietnamese migrant workers.

The country’s commodity trade surplus stems from businesses looking to diversify their supply chains as they focus on open-door trade policies, foreign direct investment (FDI) friendly policies and a positive business environment.

“This factor will be the main driving force for Vietnam’s current account surplus, with the commodity trade surplus increasing from 11.2% of GDP in 2020 to 12.1% in 2030. The Vietnamese government will improve and diversify access to international markets. We are also actively working on the 2030s. We expect the trade surplus to continue to grow in the export market under the Free Trade Agreement over the next decade,” Fitch added.