Although Cambodia's GDP projections for 2023 fell short of expectations, there is positive news coming out of the country's garment industry. Cambodia is now emerging as one of the world's largest garment exporters, marking a significant rise for the country. According to the World Trade Organization, Cambodia currently ranks 8th in terms of garment exports, up from 11th in 2021, contributing 1.6% to the global market.
Cambodia's presence in the garment industry has reshuffled the top ten garment-exporting nations. China remains the leader with a significant market share (31.7%), followed by the European Union (27.1%) and Bangladesh (7.9%). Meanwhile, Cambodia (1.6%) has overtaken Pakistan (1.5%). Other Southeast Asian countries in the top ten include Vietnam (4th with 6.1%) and Indonesia (7th with 1.7%).
Overall, Southeast Asia's production still accounts for only a quarter of China's total exports. China's $182.4 billion global market share makes it the dominant player. Meanwhile, in this region, Cambodia's garment exports reach $9.1 billion, slightly behind Indonesia's $10.1 billion and well below Vietnam's remarkable achievement of $35.3 billion. Cambodia is still trying to catch up with its peers in Southeast Asia, according to the Khmer Times.
In January 2022, there was a 15% year-on-year growth in garments, footwear and travel goods (GFT) exports, which contributed 56.2% to total exports. It's no wonder that the GFT sector is becoming one of the mainstays of the country's export industry.
Recognizing the growth and importance of this industry, the Cambodian government has shifted its focus through the Textile and Apparel Industry Transformation Map Strategy (T&A ITM) for 2023-2027. The strategy aims to improve working conditions and the investment climate in the sector, which will have a positive impact on the country's economy.
Chy Sotharith of the Cambodian Ministry of Commerce told the WTO that the EU's new regulations have helped Cambodian garment producers. Previously, the EU's rules on the origin of goods posed a challenge to Cambodian manufacturers due to domestic fabric requirements. However, following reforms to the Generalized System of Preferences (GSP), imports from Least Developed Countries (LDCs) are duty-free and quota-free, allowing the use of imported fabrics. As a result, Cambodia's garment exports to the EU have stabilized.
With optimistic growth prospects, the Cambodian government expects the garment manufacturing sector to grow by 8% in 2024. Despite a decline in 2023, the sector is expected to experience a promising revival for the country's economy.
