Int’l trade dips 14.5% as deficit shrinks

However, one silver lining amidst the series of declines shown by provisional Customs (GDCE) data was that Cambodia’s trade deficit – the amount by which a country’s imports exceed its exports – clocked in at just $468.119 million, narrowing by 72.93 per cent year-on-year from $1.729 billion, 76.83 per cent half-on-half from $2.020 billion, and 50.87 per cent quarter-on-quarter from $952.74 million, as the Kingdom’s overseas sales maintained a steady pace.

The Kingdom’s first-quarter international trade was worth $11.252 billion, down 14.52 per cent year-on-year from $13.163 billion, down 18.34 per cent half-on-half from $13.779 billion, and down 1.31 per cent quarter-on-quarter from $11.402 billion, according to the GDCE.

In the January-March period, Cambodian exports were to the tune of $5.392 billion, down 5.68 per cent year-on-year from $5.717 billion, down 8.29 per cent half-on-half from $5.879 billion, but up 3.20 per cent quarter-on-quarter from $5.225 billion.

At the same time, imports came in at $5.860 billion, down 21.30 per cent year-on-year from $7.446 billion, down 25.82 per cent half-on-half from $7.900 billion, and down 5.14 per cent quarter-on-quarter from $6.177 billion, GDCE statistics indicate.

Speaking to The Post from Australia on May 4, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that a collision of crises generally associated with 2022 has been slowing commercial activity in most countries, including Cambodia, despite the easing of the Covid-19 pandemic.

These marked declines in trade have been seen since at least the second half of last year, he pointed out.

Highlighting the reductions in the Kingdom’s trade deficit recorded for the first quarter, Heng noted that while exports did indeed slip year-on-year, albeit slightly, the decline was far more pronounced for imports.

“Cambodia’s international trade volume in the last few months of 2022 and the beginning of 2023 was not up to par. The reason for that is because of a line of major setbacks to economic growth encountered by Cambodia’s trading partners,” he said, suggesting that the situation appears to be improving slowly but surely nonetheless.

Improvements in global political and economic circumstances will drive Cambodia’s international trade growth, on the back of the Kingdom’s bilateral and multilateral trade agreements, Heng stressed.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, pointed to the Ukraine conflict’s devastating knock-on economic effects on developed countries such as the US and those in Europe, which have in turn severely diminished orders for Cambodian goods, especially textile-related items.

“The ripple effects of the war have disrupted supply chains for certain raw materials and also pushed up their prices – transport costs have risen, as has goods inflation. This is why demand for consumer goods is declining,” he said.

Still, Vanak was optimistic that, given successful resolutions to the Ukraine crisis and certain geopolitical conflicts, Cambodian agricultural exports could soar, especially of items that receive preferential tax treatment.

According to the GDCE, Cambodia’s top export category for the first quarter was “articles of apparel, knit or crocheted” with a value of $1.047 billion, or a 19.42 per cent share, which was down 27.30 per cent year-on-year, followed by “electrical, electronic equipment” ($736.776M; 13.66%; up 101.70%).

The next four categories were: “articles of apparel, not knit or crocheted” ($607.495M; 11.27%; down 12.81%), “cereals” ($538.096M; 9.98%; up 33.09%), “articles of leather, animal gut, harness, travel good” ($385.197M; 7.14%; down 22.32%) and “footwear, gaiters and the like” ($323.757M; 6.00%; down 23.18%).

These correspond to chapters 61, 85, 62, 10, 42 and 64 of the Harmonised System (HS) of Tariff Nomenclature.

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