Record surge in garment, footwear, and travel goods in Q1

Record surge in garment, footwear, and travel goods in Q1

Cambodia exported garment, footwear and travel products (GFT) worth $3,419 million in the first quarter (Q1) of 2025, up 20 percent from the $2,848 million reported in the same period a year earlier, said a report from the General Department of Customs and Excise of Cambodia.

Apparel and textiles accounted for $2,442 million during the January-March period, up 19 percent year on year, read the report.

Footwear represented $461 million, up 33 percent from a year earlier, while travel goods accounted for 561 million, up 15 percent year on year.

The main markets for the Kingdom’s GFT products are the US, EU, Canada and Japan, according to the Ministry of Commerce.

Currently, Cambodia exports products GTF goods, solar panels, furniture, bicycle to the US under the trade preference scheme of the Most Favoured Nation (MFN).

However, the industry is facing a wave of global trade barrier escalation, notably the US’s tariffs.

Penn Sovicheat, Secretary of State and Spokesman at the Ministry of Commerce, said that Cambodia is diversifying markets for made-in-Cambodia products to ensure the sustainable growth of the manufacturing sector in the country.

“The US remains the biggest market for Cambodia’s products. But at the same time, the country is diversifying markets to other markets, like in the regional markets such as the RCEP bloc,” Sovicheat said.

After the US’s temporary suspension of the implementation of the US Reciprocal Tariff on Cambodia for 90 days with a lowered reciprocal tariff during this period of 10 percent, the Royal Government formed the ad hoc inter-ministerial-institutional negotiation task force, led by Sun Chanthol, Deputy Prime Minister and First Vice President of the Council for the Development of Cambodia, to commence negotiations soon with the US Trade Representative.

The GFT industry is the largest foreign exchange earner for the Kingdom.

The sector consists of about 1,608 factories, employing approximately 913,000 workers, mostly female, according to the Ministry of Labor and Vocational Training’s latest report, Heng Sour, Minister of Labor and Vocational Training, said.

“The industry not only provides income for workers but also generates income for the economy, emphasizing that it remains a strong backbone for Cambodia’s economy,” Sour said at the 2025 Textile Summit held early this month.

Cambodia is expected to maintain a steady economic growth trajectory in 2025 and 2026, driven by external demand for manufactured goods and the continued recovery in the tourism sector, according to The Asian Development Outlook April 2025 report released on April 9.

“Cambodia’s economy is forecast to grow by 6.1 percent in 2025 and 6.2 percent in 2026,” ADB stated in the outlook.

This growth is primarily driven by increasing external demand for manufactured goods and continued recovery in tourism, according to the outlook.

However, the ADB report stated that this positive outlook is subject to large downside risks.

These include weakened exports due to tariffs on Cambodian goods amid global trade barrier escalation and slower growth in major trading partners, rising nonperforming loans disrupting financial sector growth, and extreme weather conditions.

khmertimeskh