Thailand
Cambodia: Job loss fears as GFT exports decline by 25 percent in February
Cambodia’s exports of garments, footwear and travel (GFT) goods declined by nearly 25 percent in February 2023, compared to the same period in 2022, continuing a trend that started nearly six months ago raising fears of factory closures and job losses.
While Cambodia exported GFT goods worth $986 million in February 2022, it managed to export only $744 million worth of GFT goods last month, indicating a decline of 24.54 percent, the trade data released by the General Department of Customs and Excise (GDCE) on Friday showed.
Exports of GFT goods declined by over 28 percent in January last too as compared to January 2022, to $782 million from $1.08 billion.
The share of the exports from the sector, which is the biggest export earner for the Kingdom, stood at 43.31 percent for February this year, while it was still above 50 percent in January, raising further concerns about the declining trend.
Among the GFT goods, knitted apparel brought in $326 million for February 2023, a decline of 28.4 percent, compared to the $456 million earned in February 2022 while non-knitted apparel articles that earned $201 million last month went down by 12.7 percent over the same period, with February 2022 recording $231 million.
Travel goods netting $124 million for last month slid by 24.4 percent year-on-year. Footwear exports earned just $92 million, also showing a decline of 31.6 percent compared to the same period in the previous year.
According to industry experts, export orders for GFT goods would not revive until mid-2023 as retailers in Europe and the US have just too much stock from unsold goods of the previous seasons. Ukraine war and inflation have also caused a downward trend in the global demand for GFT.
The Cambodian government, meanwhile, is planning to launch a scheme in partnership with textile and garment factory owners to provide financial support to workers who lost jobs because of factory closures.
According to some reports, more than 70 factories closed down in the country, leaving 32,023 workers unemployed, of whom 26,055 are female.
While highlighting the role of the GFT sector for the country, Ky Sereyvath, Director General of the Institute of China Studies at the Royal Academy of Cambodia, told Khmer Times recently that the sector plays a very important role in the Kingdom’s economy and helped it to fight off the pandemic woes.
“The GFT sector created jobs for local people and this was vital for the country’s recovery from the Covid-19 slowdown,” he said.
Data from the National Institute of Statistics (NIS) also suggested that the continued progress of the GFT sector was crucial for the Kingdom during the Covid-19 pandemic.
The sector accounted for 11 percent of the economy and contributed around 50 percent of Cambodia’s real GDP growth in 2021. This indicated that the GFT sector had been functioning relatively well throughout the Covid-19 pandemic, while other sectors such as tourism suffered greater setbacks.
In March 2022, the Royal Government of Cambodia launched the ‘GFT Sector Development Strategy 2022–2027,’ which underscores the sector’s important role as a major economic growth pillar, with GFT exports averaging over 70 percent of Cambodia’s total merchandise exports over the past decade and more.
The 2023 economic outlook of the National Bank of Cambodia (NBC), released recently, however, forecasted that the GFT sector in the country would expand (not just exports) by 6.5 percent this year.
The strategy also emphasizes the sector’s direct and indirect contributions to the livelihoods of between 2.5 to 3 million Cambodians.
Source: https://www.khmertimeskh.com/501253565/job-loss-fears-as-gft-exports-decline-by-25-percent-in-february/