Exports to South Korea help reduce current trade deficit: pundit
Exports to South Korea help reduce current trade deficit: pundit
Trade between Cambodia and South Korea reached nearly $504 million in the first eight months of 2023, marking an 8.4 per cent decline over the same period last year, according to the General Department of Customs and Excise (GDCE). Despite this, Cambodian exports surged by almost 21 per cent.
The GDCE’s eight-month International Trade Statistics reveal that bilateral trade between the nations was $503.75 million, down from $549.93 million in the corresponding period the previous year. Korea ranks as Cambodia’s 12th largest trading partner, trailing behind China, the US, Vietnam and Thailand.
Breaking down the figures, Cambodian exports to Korea stood at $189.38 million, a rise of 20.9%, while imports from the country decreased by 20.1%, amounting to $314.37 million. This data highlights a trade deficit of $124.99 million for Cambodia. In the same period in 2022, the deficit was higher at $236.69 million.
During the month of August, trade volume between both countries was valued at $56.69 million, 9.23% lower than August 2022. Cambodia saw exports worth $24.69 million during the month, an upswing of 16.6% while imports from Korea dropped by 22.4% to $32.05 million.
Hong Vannak, an economist at the Royal Academy of Cambodia’s International Relations Institute, commented that revisions to the Kingdom’s investment law, coupled with new free trade agreements, have enhanced the country’s appeal to investors.
He remarked that Cambodia’s export portfolio is now diverse, shipping not only textiles but also agricultural products globally. Major exports to Korea include garments, footwear, travel goods and agricultural products, whereas Korea primarily exports automobiles, agricultural machinery, electronic products, pharmaceuticals, beverages and daily essentials to Cambodia.
“While Cambodia’s revenue from exports to Korea has been consistently growing, it still lags behind imports. Cambodia must diversify its exports further to adapt to all market conditions, including those in Korea,” he said.
Chea Chandara, president of the Logistics and Supply Chain Business Association in Cambodia (LOSCBA), attributed the global trade downturn to escalating political and economic crises. However, he was quick to highlight that production and transportation within Cambodia remain unaffected and that the real challenge is dwindling orders from overseas.
“Cambodia has significantly developed its transport infrastructure amid the worldwide economic slump. This will undoubtedly bolster our national economic growth once global conditions stabilise,” he added.
For reference, 2022 saw Cambodia-Korea trade valued at $778.924 million, a minor increase of 0.6% from 2021. Cambodian exports were $233.638 million, marking a 20.4% increase, whereas Korean imports to Cambodia were $545.286 million, reflecting a 6% decline.
