Garment and manufacturing exports have risen by 13.5 per cent over the same time in 2020 – following a 20 per cent contraction from 2019 – buoyed by favourable arrangements with trading partners and a shift of orders from Myanmar and Vietnam to Cambodia, according to Prime Minister Hun Sen on December 16.
The prime minister was speaking at the opening of a plenary session of the Council of Ministers.
He argued that manufacturing production saw no major interruptions during Covid-19, and that the industry continued to show its potential value throughout the crisis, which he said made it and garments a favourite of trading partners.
He said that as buyers steered orders away from Myanmar and Vietnam to the Kingdom, “our factories remained fully operational, as workers also got to do overtime work”, which also triggered an upsurge in imports and exports of raw materials for production.
Garment Manufacturers Association in Cambodia deputy secretary-general Kaing Monika told The Post on December 16 that exports of leather apparel and travel goods had logged a considerable jump this year.
Broken down by segment, exports of clothing, footwear and travel goods in January-September respectively rose by five per cent, 15 per cent and 30 per cent year-on-year, he said.
“In general, garments are low-growth products, and Cambodia needs to be very competitive with other countries, especially Bangladesh and Vietnam,” Monika said, noting that exports of travel goods, in particular, are driven by duty-free access to the US.
“Compared to last year, the health of the Cambodian garment sector has improved in 2021 due to stable production, leading to an increase in exports, as orders for this year also recorded gains over a year earlier,” he added.
Cambodia exported $9.50171 billion worth of garments – including apparel, footwear and bags – in 2020, marking a 10.44 per cent plunge compared to $10.60986 billion in 2019, according to the Ministry of Commerce.
The government has pegged the Kingdom’s economic growth at three per cent for 2021, whereas the World Bank earlier this month presented a less rosy figure of 2.2 per cent.
The Washington-based multilateral lender contended that the country’s real gross domestic product (GDP) growth would be impeded by slow growth in services including tourism, and in construction and real estate.
It highlighted that other traditional growth drivers, especially the garment, travel goods, footwear and bicycle manufacturing industries, as well as agriculture, are underpinning the economic recovery.
Despite recovery in manufacturing exports and expansion of agricultural commodity exports, the trade deficit has widened significantly, it said, attributing the trend to rising imports of a few items, especially gold, used for savings.
According to the World Bank, Cambodia’s growth outlook is expected to continue to recover as Covid-19-related restrictions are lifted. Growth is projected to reach 4.5 per cent next year, it said, but noted that any renewed spread of the virus could put the recovery at risk.