Logo of Phnom Penh Post newspaper Phnom Penh Post - Trade deficit prompts call to diversify exports

Trade deficit prompts call to diversify exports

Trade deficit prompts call to diversify exports

Cambodia's trade deficit expanded to almost half a billion dollars during the first three months of the year, according to the latest figures from the Ministry of Commerce.

Between January and March, Cambodia’s exports reached $1.99 billion, up 19 per cent compared to the same period last year, while imports reached $2.47 billion, up 12 per cent. In total, the country’s trade volume increased 15 per cent year-on-year to $4.46 billion.

Cambodia’s $480 million, trade deficit, which represents a $100 million widening over the first quarter last year, has spurred calls from senior economists for Cambodian manufacturers to diversify their exports to make up the imbalance.

Hiroshi Suzuki, CEO and chief economist at the Business Research Institute for Cambodia said that the trade deficit was not concerning, but increasing and exploring new export markets was an inevitable next step for the local economy.

“It is necessary for Cambodia to continue the effort to diversify export destinations and export items,” Suzuki said, naming vehicle parts manufacturing as a potentially lucrative new sector for
the Kingdom.

“Increasing exports to decrease trade deficit is very necessary to avoid putting the economy at risk.”

Mey Kalyan, senior advisor to the Supreme National Economic Council, yesterday said the trade imbalance had primarily been caused by massive inflows of FDI and offshore development assistance packages.

“It is still a concern and we have to be a bit careful,” Kalyan said.

“If we let it continue it will not be a good thing for us.”

Kalyan added that imports on simple, day-to-day items, such as groceries and food, and materials for garment manufacturing were also major contributors to the country’s import figures.

The Ministry of Commerce listed garment materials, oil and gas, construction material, vehicles, food and bevarage as the main imports, while garments and textiles, footwear and rice were the country’s major exports during the first three months of the year.

MOST VIEWED

  • Ethnic group ‘disappointed’ to be denied French visas to attend court

    Eleven people at the centre of a case involving seven indigenous Bunong villages in Mondulkiri province pursuing legal action in France have expressed disappointment after the French embassy in Phnom Penh denied their visa applications to attend court. A press release said the 11 included a

  • EBA withdrawal provides ‘opportunity for growth’

    Economic analyst Khoun Bunny said on Tuesday that the loss of the EU’s preferential Everything But Arms (EBA) agreement could be a golden opportunity for Cambodia to show it deserved to be ranked sixth on the list of the world’s fastest-growing economies. Government

  • Malaysia MP accused of ‘influencing law’

    Malaysian Member of Parliament (MP) Larry Sng arrived in Siem Reap early on Wednesday, in what was slammed by one NGO as efforts by Kuala Lumpur to “influence Cambodian law”. The Malaysian Embassy in Phnom Penh requested on January 30 “cooperation from the Ministry of Foreign

  • Ministries begin measures to offset EU’s EBA decision

    In the wake of the EU’s controversial announcement this week that it has begun the withdrawal process for Cambodia’s Everything But Arms (EBA) preferential agreement, government ministries and political analysts continued to share their reactions and economic mitigation plans in preparation for the