Cambodia's total exports to the United States increased by 0.2 per cent over the first 10 months of the year, a year-on-year analysis from the US Department of Commerce showed.
Officials said the main reason for the weak growth was the slowdown of the US economy, the effect of the European sovereign debt crisis and America’s presidential election. Meanwhile, a Cambodian economist raised concerns that the decreased trade would certainly effect Cambodia’s economic growth.
The data showed exports to the US totalled $2.296 billion between January and October this year, compared to $2.291 over the same period last year. Meanwhile, total exports over the first 10 months of 2011 rose more than 20 per cent compared to the same period in 2010.
Data from Cambodia’s Ministry of Commerce show that Cambodia’s main exports to the US are garments and footwear, which represent 70 per cent of total exports. Milled rice was the third most exported.
Kang Chandararot, president of the Cambodian Institute for Development Study, raised concern over the slow growth. “It shocked me to see the report for this year,” he said. “It surprises me and I became really concerned about our economic growth for this year,” he added.
“The United States is Cambodia’s big market for garment exports. It helped us a lot with economic growth for years. Now, if our growth rate is very low, our economic growth will be low as well,” said Kang Chandararot.
Sean J McIntosh, public affairs officer for the US Embassy in Phnom Penh, said there are many things affecting trade between countries.
“Trade between countries is influenced by several factors. I will not speculate on the reason behind the 0.2 per cent increase. I refer you to the Cambodian Ministry of Commerce for additional information,” he wrote in an email yesterday.
Kon Putheara, a spokesman for the Ministry of Commerce, told the Post that international issues in the US and its economic slowdown are the main issues.
“I don’t think it will be a big issue for our exports to the US,” he said. “You see this year that their economy is still not good and the European debt crisis is still going on. That would affect some companies in the US, which would result in reduced demand from their people,” he added.
According to Kang Chandararot, Cambodia’s garment exports to the US will be further hit by changes in US fiscal policy.
“Of course, 2013 is not much better than 2012. A lot depends on the fiscal policy in the US. We are all worried about the issue. You see this year, they don’t have any problems, but we already decreased in export so next year when they have more problems, we will get even worse figures.
“We should try to seek more markets in Asia or Europe. At the same time, we should also enhance other sectors such as tourism and agriculture to replace garments in our economy,” he said.
McIntosh would not comment on the impact of the US fiscal cliff on future trade between the two countries.
The IMF, World Bank and the ADB as well as the Cambodian government project Cambodia’s annual GDP growth for 2012 to be between 6.5 to 7 per cent. Cambodia’s economy is primarily supported by four main industries: garments, tourism, agriculture and construction.