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Recovery in large economies gives exports a boost

Recovery in large economies gives exports a boost

Aided by the recovery of large economies in the United States, the European Union and Japan, Cambodia’s exports jumped more than 20 per cent during the first half of the year compared with the same period in 2012.

Ministry of Commerce data released at the end of last week showed that total exports in the first six months were worth more than $3 billion, a 26 per cent year-on-year increase. Imports, meanwhile, topped exports, at a value of $4.5 billion.

“For Cambodia’s export sector, such as garment and shoes, the good economic situation in major export destinations is most welcome,” said Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia.

Grant Knuckey, CEO of ANZ Royal Bank, said that the export figures were in line with expectations, and reflective of improvements in quality and processed products.

According to the statistics, total exports of garment wear and textiles went up by nearly 20 per cent to $2.5 billion. Agricultural exports rose by 40 per cent in the same period to reach $293 million, while the remaining products cover a wide range of goods, including electronics.

Knuckey said that the growth of the garment sector is indicative of the pick-up in the US economy. Agricultural exports are less sensitive to growth there because, as staple items, they are under more recently adopted fixed-volume contracts to Europe and the Middle East.

“As such I expect the growth trend on the agricultural side to be maintained,” he said.

Hiroshi said that in addition to garment and shoe exports, the product diversification is a positive sign.

“The export of parts manufactured by Japanese factories in Cambodia seems to grow. This is one piece of evidence that shows the success of the government policy to invite foreign direct investment, especially the labour-intensive industry from Japan,” he said.

“Cambodia’s export diversification of export items [from garments to parts], and export destinations [from the US and the EU to Japan and ASEAN], is now getting the success based on the increase of foreign direct investment.”

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