Cambodia’s exports of garment, footwear, and travel goods to the European market are likely to decline.
Among the reasons are spillover effects from the war in Ukraine, with an especially sharp downward revisions for economies most dependent on Russian gas supply. If the energy crisis in the EU gets resolved, it will be a good sign for Cambodia’s exports to the EU. The euro area economy grew by 5.2 percent in 2021 and 3.1 percent in 2022. It is projected to grow only at 0.5 percent in 2023.
The European Union is one of the biggest markets for Cambodia’s garment products. In 2022, Cambodia exported over $9 billion worth of garments, footwear, and travel goods. The garment, footwear and travel goods industry is the largest foreign exchange earner for Cambodia. The sector consists of roughly 1,100 factories and branches, employing about 7,50,000 workers, mostly women. The garment sector is a crucial part of Cambodia. But it also sees challenges of competition that need to be addressed and require attention to keep the production chain in the garment sector.
The share of Cambodia’s exports to some other markets – outside the US and the EU – increased to 33 per cent in 2021, from just 28 per cent in 2020.