ASEAN KEY DESTINATIONS
April 9, 2008
Cambodian may see a slower growth of 7 percent this year due to its over reliance on export of garments, said a report issued by the United Nations Economic and Social Commission for Asia and the Pacific (Escap) Tuesday.
"Cambodia's export growth is fragile due to its concentration in the garment industry, which accounts for more than 70 percent of the country's exports," said Escap in a relevant press release.
In the report, Escap said that, "a key concern lay in the country's narrow export base which was considered vulnerable because of its dependence on garment exports."
Meanwhile, low cost competitors from Vietnam and India are also gaining market shares, it said.
The sector is the country's largest generator of foreign exchange but only grew by 8 percent in 2007 over 2006, it added.
Earlier this month, the Asian Development Bank (ADB) predicted that Cambodia's Gross Domestic Products (GDP) growth is expected to slow to 7.5 percent this year due to the nation's narrow industry base and a slump of its garment sector
"The prolonged economic expansion is forecast to slow, both this year and next, in large part reflecting reduced external demand for domestically-made clothes," said the bank in its annual report, which predicts GDP will further drop to 7.0 percent in 2009 for Cambodia.
The garment industry will suffer in the next two years due to less demand from the United States and Japan, it said.
Cambodia's GDP growth soared to 13.4 percent in 2005,. It has hovered around double-digits since and reached a respectable 9.6 percent last year, according to ADB statistics.