Cambodia’s trade deficit with the rest of the world continued to widen last year to $7.76 billion, a more than 31 per cent increase compared to the previous year, a National Bank of Cambodia (NBC) report released on Wednesday said.
The NBC figures revealed that the Kingdom imported some $22.34 billion worth of goods last year while it exported only $14.63 billion – causing some $7.76 billion in trade deficit.
The central bank’s figures showed that the year-on-year growth rate in imports was 18.6 per cent last year, while exports lagged at 12.7 per cent.
Cambodia’s major exports of textiles, shoes, rice and bicycles were overshadowed by imports in oil, vehicles, construction materials, food and beverage, and raw materials for the manufacturing sector, the report said.
Ministry of Commerce spokesman Seang Thay told The Post on Wednesday that it is normal for developing countries like Cambodia to see its trade deficit increase because of the need to import new equipment and raw materials for production.
“It is necessary to import raw materials from China to support the manufacturing sector. We also import oil, electronic equipment, construction materials, and vehicles all at a very high cost.
“If we build factories that can produce these goods, we will reduce our imports. Regardless, we collect huge tax revenue from those products, so we still benefit,” he said.
Cambodia Chamber of Commerce vice-president Lim Heng on Wednesday said the growth in the Kingdom’s exports from manufacturing and the rice sector have naturally driven demand for raw material to support local production.
“It is common for developing countries to have an import value that’s higher than their exports. It shows we are a big consumer that requires it,” he said.
The report said the US is the biggest market for Cambodia accounting for 29.6 per cent of the Kingdom’s total exports last year.
Japan is Cambodia’s second biggest export destination with 7.7 per cent, followed by the Germany at 7.2 per cent, China (6.9 per cent), and the UK (6.6 per cent).
Cambodian imports were mostly from China, which accounted for 43.1 per cent of the total in 2019. Thailand is second at 15.5 per cent, Vietnam (13.6 per cent), Japan (4.7 per cent) and South Korea (3.4 per cent).
Cambodia’s trade deficit last year amounted to $5.2 billion – a 22 per cent increase on the $4.27 billion reported in 2017.
The Kingdom’s trade deficit in 2015 and 2016 amounted to $3.94 billion and $3.84 billion respectively.