Trade deficit prompts call to diversify exports
Trade deficit prompts call to diversify exports
Cambodia's trade deficit expanded to almost half a billion dollars during the first three months of the year, according to the latest figures from the Ministry of Commerce.
Between January and March, Cambodia’s exports reached $1.99 billion, up 19 per cent compared to the same period last year, while imports reached $2.47 billion, up 12 per cent. In total, the country’s trade volume increased 15 per cent year-on-year to $4.46 billion.
Cambodia’s $480 million, trade deficit, which represents a $100 million widening over the first quarter last year, has spurred calls from senior economists for Cambodian manufacturers to diversify their exports to make up the imbalance.
Hiroshi Suzuki, CEO and chief economist at the Business Research Institute for Cambodia said that the trade deficit was not concerning, but increasing and exploring new export markets was an inevitable next step for the local economy.
“It is necessary for Cambodia to continue the effort to diversify export destinations and export items,” Suzuki said, naming vehicle parts manufacturing as a potentially lucrative new sector for
the Kingdom.
“Increasing exports to decrease trade deficit is very necessary to avoid putting the economy at risk.”
Mey Kalyan, senior advisor to the Supreme National Economic Council, yesterday said the trade imbalance had primarily been caused by massive inflows of FDI and offshore development assistance packages.
“It is still a concern and we have to be a bit careful,” Kalyan said.
“If we let it continue it will not be a good thing for us.”
Kalyan added that imports on simple, day-to-day items, such as groceries and food, and materials for garment manufacturing were also major contributors to the country’s import figures.
The Ministry of Commerce listed garment materials, oil and gas, construction material, vehicles, food and bevarage as the main imports, while garments and textiles, footwear and rice were the country’s major exports during the first three months of the year.
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