Middle East conflicts drive up raw material prices, Vietnam's trade deficit in May widens to a historical high

(1) Due to the ongoing conflict in the Middle East causing global raw material prices to rise, Vietnam’s imports surged in May, expanding its trade deficit to a historic high. According to data from the Vietnam Statistics Office, the trade deficit in May reached 5.21 billion US dollars, higher than April’s 3.28 billion US dollars.(2) In May, Vietnam’s exports grew by 18% year-on-year, lower than economists’ expectations of 19.7%; imports increased by 33.8% year-on-year, above expectations. The Middle East conflict has pushed up crude oil and other costs, delivering a heavy blow to Vietnam's export-driven economy. The Vietnamese government stated that achieving this year’s 10% growth target will be “full of challenges.”(3) Data from the Vietnam Statistics Office also shows that the United States remains Vietnam’s largest export market. From January to May this year, Vietnam’s trade surplus with the United States increased by 21.1% year-on-year, reaching 60.4 billion US dollars.