Cambodia’s exports of garments, footwear and travel (GFT) goods grew by around 15 percent in 2022 compared to the previous year, from $10.99 billion to $12.63 billion, but the total share of the sector declined marginally, according to the latest report on trade by the General Department of Customs and Excise (GDCE).
The GFT sector continued to be the largest export earner for the country accounting for 56.2 percent of the total exports last year but its share declined from 56.9 percent in 2021, showed the GDCE report released on Tuesday.
Among the GFT goods, exports of footwear grew by 24.8 percent in 2022 compared to the previous year, while non-knitted apparel articles went up by 21.4 percent, travel goods by 17.6 percent and knitted apparel articles by 9.4 percent.
The latest statistics also indicated that the GFT exports in the second half of last year declined compared to the first half when it showed a growth of nearly 40 percent.
Massimiliano Tropeano, Sustainability and Garment Expert, told Khmer Times yesterday that the export orders would not revive until mid-2023 as retailers in Europe and the US have just too much stock from unsold goods of the previous seasons.
“Moreover, the Ukraine war and inflation have done the rest in pushing the garment global demand down,” he said.
Meanwhile, the 2023 economic outlook of the National Bank of Cambodia (NBC), released yesterday, reckoned that the GFT sector in the country would expand (not just exports) by 6.5 percent this year.
Data from the National Institute of Statistics (NIS) suggested that the continued progress of the GFT sector was crucial for the Kingdom during the Covid-19 pandemic.
The sector accounted for 11 percent of the economy and contributed around 50 percent of Cambodia’s real GDP growth in 2021. This indicated that the GFT sector had been functioning relatively well throughout the Covid-19 pandemic, while other sectors such as tourism suffered greater setbacks.
In March 2022, the Royal Government of Cambodia launched the ‘GFT Sector Development Strategy 2022–2027,’ which underscores the sector’s important role as a major economic growth pillar, with GFT exports averaging over 70 percent of Cambodia’s total merchandise exports over the past decade and more.
The strategy also emphasizes the sector’s direct and indirect contributions to the livelihoods of between 2.5 to 3 million Cambodians.
Despite being one of the key drivers of the Cambodian economy, the GFT sector still faces challenges related to its competitiveness and long-term sustainability. The sector’s current exports are reliant on preferential market access granted by the US and the European Union (EU) which makes it highly vulnerable to the potential withdrawal of such agreements, or to other external shocks.
Huot Pum, Under Secretary of State, Ministry of Economy and Finance, recently said that Cambodia gets immediate impacts of global economic slowdown as it is a small economy that is also fully open to the world for business.
While participating in an event in connection with the release of the ‘GFT Sector Brief’, organised by the European Chamber of Commerce along with the Textile, Apparel, Footwear & Travel Goods Association in Cambodia, Pum said the GFT Sector Development Strategy 2022-2027 targets to strengthen human resources, improve working conditions, promote investment in high value-added and high-end products, promote investment in support industries and promote market diversification within the industry.
Source: Manoj Mathew / Khmer Times