Export growth defies global challenges
DESPITE numerous challenges in 2023, stemming from geopolitical conflicts between superpowers and armed conflicts in some countries, global trade flows have been resilient. Cambodia’s exports to international markets remained robust, surpassing $22 billion, marking a modest increase year-on-year.
The General Department of Customs and Excise (GDCE) released data on January 10 indicating that the country’s exports in 2023 exceeded $22.65 billion, a 1.8% increase from $22.25 billion in 2022.
Imports amounted to $24.18 billion, reflecting a 5% decrease from $25.46 billion in 2022.
The performance in international trade brought the country’s total trade value in 2023 to $46.83 billion, a slight decrease of 1.9% from $47.71 billion in 2022.
The trade deficit stood at approximately $1.54 billion for 2023, a substantial reduction from the $3.21 billion deficit recorded in 2022.
The country’s major trading partners include China, the US, Vietnam, Thailand, Japan, Indonesia and Germany, as per the GDCE.
For December 2023 alone, the department reported that international trade reached $4.33 billion, a 2.98% increase compared to December 2022.
The Kingdom’s exports that month rose to $2.15 billion, a 7.1% growth, while imports slightly declined by 0.8%, totalling $2.173 billion.
Private sector optimistic for export acceleration in 2024
Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), expressed his optimism in an interview with The Post on January 10.
He highlighted the significance of the recent increase in export values amidst global economic uncertainties, viewing it as a positive indicator for the country’s national economic growth.
Heng attributed this success to several factors, most notably Cambodia’s participation
in bilateral and multilateral free trade agreements (FTAs) and preferential tariffs, which provide access to major global markets.
Heng anticipates even greater growth in exports for 2024, basing the outlook on the recent approval of multiple multisectoral investment projects by the Council for the Development of Cambodia (CDC), slated to commence this year.
“I believe that the value of Cambodia’s exports in 2024 will exceed that of 2023, with a more diverse range of products. While textiles have been predominant,
we’ll also see growth in sectors like electrical equipment, electronic components and both fresh and processed agricultural products,” he stated.
Heng noted that the country’s economic strength would be bolstered by its ability to export a wider variety of goods to more markets, moving away from its previous reliance on a limited number of countries and product types.
Addressing the decline in the import value of goods, Heng attributed this to increased domestic production capacity meeting local demand and a slowdown in the construction sector, resulting in decreased imports of related materials.
Ly Khun Thai, president of the Cambodian Footwear Association (CFA), acknowledged a decrease in the export value of footwear and related items in 2023 due to the global crisis.
However, he expressed confidence in a recovery in 2024, driven by the expected resurgence of international tourism, which would boost demand for footwear and related products.
He noted that the existing stock of shoes has been gradually sold off by companies.
“For 2024, CFA experts anticipate that the export of footwear, gaiters and related parts will surpass last year’s figures. This expectation is based on the recent acceleration in shoe sales from companies ordering from Cambodia, which has improved significantly in the last six months of 2023 and continues to do so,” he said.
Trade deficit to continue narrowing
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, highlighted the impact of domestic production growth on the country’s status in the international market.
He noted that the growth is transforming the country into a major goods supplier globally.
He also noted that the international trade balance, previously in deficit, might soon shift to a surplus.
Vanak attributed the positive change to policies that facilitate favourable domestic conditions and export markets under certain tax schemes, especially important in the current global climate marked by numerous difficulties.
“New investments will help increase Cambodia’s exports and the gap in Cambodia’s international trade deficit will continue to narrow further this year,” he stated.
According to the CDC, the institution approved 247 new projects and 21 production expansion projects in 2023, 71 of which are in special economic zones (SEZs).
The initiatives represent a total investment of nearly $4.9 billion and are expected to generate approximately 307,000 jobs.