A senior official from the Ministry of Economy and Finance confirmed significant growth in Cambodia’s non-garment manufacturing sector, marking a successful implementation of the government’s economic diversification policy.

Ministry secretary of state Phan Phalla noted the impressive development at a public forum on macroeconomic management and the 2024 national Budget Law (BL), held on February 19.

“What we have seen in 2023 is another milestone in the implementation of the economic diversification policy to a level that, although not yet satisfactory, has certainly marked an important change,” he said. 

Phalla added that the country’s export focus has shifted considerably, as previously, more than 50%, and at times over 90%, of exports were garments. 

“However, last year they fell below 50% compared to non-garment product exports,” he said.

The shift, he noted, represents the economic broadening achieved in recent years, with most factories now manufacturing products other than garments.

Phalla highlighted that the government recognises four key sectors as the foundation of the country’s economy: garments, construction, tourism and agriculture. 

He said these industries continue to play a vital role in boosting the country’s economic growth.

“Although the garment sector experienced a decline in 2023, it remains an important sector for the economy, with more than 1,400 factories operating and employing over 800,000 workers,” he said.

Phalla expressed optimism that the garment sector would improve this year, given the better economic situation in the country’s trading partners.

Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), commented on the dynamic nature of future developments, noting that while one sector may decline, another might recover.

“Clearly, we see growth in the non-garment industry as a positive sign for our economy, as we can no longer rely solely on the garment sector. It will continue to decline as we lose access to the EBA [Everything But Arms] and GSP [Generalized System of Preference] trade schemes in the near future,” he said.

According to the General Department of Customs and Excise (GDCE),exports of clothing and footwear were valued at more than $9.2 billion in 2023, marking a decrease of over 10%.

Exports of machinery, electrical equipment and related parts and accessories were valued at $3.1 billion, an increase of 56.6%.