Cambodia’s total trade volume reached $18.1 billion last year, a 13.8 percent increase over $15.9 billion the year before, with the country’s trade deficit widening by more than half a billion dollars, according to the Commerce Ministry and state media.
A Commerce Ministry report released on December 30 says Cambodia exported $7.69 billion worth of goods in 2014, up from the $6.9 billion state news service Agence Kampuchea Presse reported the country exported in the previous year.
Mao Thora, a secretary of state at the ministry, said Tuesday that the increase was due to expansion of the garment and agriculture sectors.
“Last year there were more new garment factories opening in our country to produce clothes for export and more agricultural products were exported like rice, cassava, corn,” he said.
The figures show that the value of imports reached $10.43 billion last year, up from $9 billion in 2013. Mr. Thora said garment materials, cars and consumer appliances were largely responsible for the rise.
“Predominately, raw materials for producing clothes for export, like cloth and buttons, were imported because there were more new garment factories last year. Also, cars, home appliances and electronics were increasingly imported in that year,” he said.
The more significant growth in imports compared to exports increased Cambodia’s negative trade balance from $2.1 billion in 2013 to $2.74 billion last year.
Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia, said the trade deficit was not a concern, as the country’s overall economic growth relies on imported goods.
“It is very usual that the developing country has increasing trade deficit. In [order] to keep the good speed of growth, the increase of import is indispensable. The point is how to finance this increasing import,” he said via email.
John McGinley, managing partner of investment services firm Mekong Strategic Partners, said Cambodia was also poised to benefit from lower import costs if global oil prices remain low.
“We would expect the position to improve over the coming year given the fall in global oil prices, which if sustained will benefit Cambodia by around half a billion dollars through lower import costs,” he said in an email.