In the face of global economic challenges, Cambodia’s foreign trade has shown signs of improvement, with exports rising and a narrowing trade deficit. The Kingdom’s international trade volume reached $19.293 billion in the first five months of 2023, a decrease from previous years but with promising developments in May. As the world grapples with the ongoing pandemic and geopolitical tensions, Cambodia’s economic indicators point to a brighter future.
The General Department of Customs and Excise (GDCE) reported that Cambodia’s exports reached $9.183 billion in the January-May period, while imports stood at $10.109 billion. Despite the overall decline in international trade volume, the trade deficit for the five-month period shrank by 74.60% year-on-year. This is a positive development for the Kingdom’s economy, as it indicates that the country is gradually becoming less reliant on imports and more focused on domestic production.
Cambodia’s top trading partners for the January-May period were mainland China, the US, Vietnam, Thailand, Singapore, Japan, Switzerland, Hong Kong, Germany, and Taiwan. These countries have experienced varying levels of economic growth and trade relations with Cambodia, but the overall trend is one of increased cooperation and stronger ties.
“Cambodia’s foreign trade demonstrates remarkable resilience and adaptability in the face of global economic challenges. The Kingdom’s commitment to boosting domestic production and fostering strong trade relations is paving the way for a brighter economic future, positioning Cambodia to thrive as the world recovers and international trade rebounds.”
Economist Hong Vanak from the Royal Academy of Cambodia attributes the decline in international trade volume to a decrease in imports, as Cambodia continues to increase its domestic production capacity. He believes that the country’s economic growth will not be significantly affected by the decline in trade volume, as long as industrial and agricultural production continues to accelerate.
The uptick in domestic production not only reduces Cambodia’s reliance on imports but also provides the Kingdom with more goods to sell on international markets. As global economic conditions improve, Cambodia’s exports are likely to accelerate, further bolstering the country’s economy.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng also noted that improvements have been made in the production of various commodities despite the lackluster global economic momentum. The Kingdom’s reliance on imports to satisfy domestic demand has diminished over time, and exports have increased, fueled by preferential tariff treatment and strong cooperation underpinned by trade agreements.
Prime Minister Samdech Hun Sen recently projected Cambodia’s economic growth rate for 2023 at around 5.6%, up from an estimated 5.2% in 2022. This figure is in line with forecasts from the Ministry of Economy and Finance and the National Bank of Cambodia. As Cambodia’s trade balance continues to improve, the country’s economy is expected to grow even in the face of global economic turbulence.
Cambodia’s foreign trade has shown resilience and signs of recovery amid challenging global economic conditions. The Kingdom’s focus on domestic production, coupled with strong trade relations and preferential tariff treatment, has contributed to a healthier trade balance and a brighter economic outlook. As the world moves towards recovery, Cambodia’s economy is well-positioned to benefit from the resurgence in international trade.
Source: The Phnom Penh Post
