Sluggish garment exports to result in lower economic growth

09 Jun '08

2 min read

Despite a strong economic performance by the various industrial and agricultural sectors of Cambodia, the pace of growth is anticipated to be lower than the previous year.

Economic growth of the country this year is expected to hover near 7 percent which is noticeably low compared to the 10 percent secured in 2007.

Experts have opined that the drop in economic growth can be attributed to the slow growth in the garment sector which is presently facing immense problems due to global market turmoil.

Garment exports have deteriorated considerably due to a decline in international demand and stiff regional competition. Export growth, especially to the US, began to slow in late 2007 accompanied by stiffer competition from Vietnam.

This has made a huge impact on the overall economy of Cambodia since the garment sector is one of the major contributors to the country's gross domestic product with around 300 factories and over 340,000 workers making exports worth US $2.9 billion last year.

An International Monetary Fund staff mission recently visited Cambodia from May 28 to June 5 for holding discussions with Governmental officials on macroeconomic developments and policies. It is hoped that with a change in policies and infrastructures would help give a thrust to the soggy exports of the country.

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