Exports of garment and footwear products achieved solid growth during the first half of the year, expanding by 9.3 percent.
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According to the Ministry of Commerce, exports from the country’s garment industry were valued at $3.7 billion during the first six months of the year.
The growth in export activity was achieved despite recent warnings from the European Union and the US – the Kingdom’s main trade partners – that they would annul Cambodia’s preferential trade status if the human rights situation in the country fails to improve.
The solid performance of the sector also comes during a sensitive time for the country, with Cambodia celebrating its sixth national poll on Sunday.
According to figures from the ministry, textile shipments to the European bloc grew by 10.66, achieving a total value of more than 1.6 billion, while those to the US rose by 10.73 percent and were worth $858 million.
These two markets jointly accounted for 72 percent of the Cambodia’s total exports.
Exports to Canada expanded by more than 9 percent, reaching a value of $324 million, while shipments to the rest of the world grew by 10.10 percent and were valued at $850 million.
Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia (GMAC), said the overall performance of the sector has been impressive, particularly taking into consideration that the national election had many investors worried.
“The EU and the US are, and will continue to be, our most important markets. We are confident that the relationships between our countries will improve through mutual understanding and respect,” he said.
He said the encouraging numbers in export growth were the result of peace and stability in the country.
“Stability and public order is crucial for business activity and investment. This is the kind of environment the country needs to ensure further development, not only for export-oriented sectors, but for the whole economy,” he said.
The National Bank of Cambodia recently released its latest economic forecast, placing the country’s economic growth for the year at 7 percent, backed by a strong performance of the garment, tourism and construction sectors, among others.
“From a macroeconomic perspective, the country is strong, with garments being one of the main contributors to national growth,” said Chea Serey, NBC’s director general.
Following the dissolution in November of the main opposition, the Cambodia National Rescue Party (CNRP), the US and the EU threatened to cut back some of the trade preferences Cambodia currently enjoys.
The EU, in particular, said it would annul the Everything-but-arms scheme – which allows Cambodia to export to the European market duty and quota free – if the human rights situation in the country does not improve.
The CNRP was outlawed following allegations that its president, Kem Sokha, had colluded with the US to topple the government.
The EU is Cambodia’s top export destination, accounting for 40 percent of all its exports. These have risen sharply in recent years, increasing by 227 percent between 2011 and 2016, and reaching €5 billion in value last year alone. Cambodia now is second amongst all EBA beneficiaries in terms of trade volume.