Garment export growth slows in 1H17

Cambodia’s garment exports grew 4% YoY in 1H17, down from 9% in 1H16, while foreign investment in the sector declined by 30%, according to a report released by the National Bank of Cambodia (NBC) last Saturday. The report attributed the slow growth to falling exports to the US amid rising competition from Vietnam and Myanmar, and high production costs due to the increasing minimum wage. The report added that the decline in foreign investment in the sector was due to investors realizing that in the next three years Cambodia will no longer enjoy preferential tax treatment from the EU as it transitions from a lower-income country to a lower-middle-income nation. Cambodia will face tough competition in the global market in the medium and long term as Vietnam will receieve preferential tax treatment in 2018 on its exports to the EU under a free trade agreement, said Chea Serey, NBC’s director-general. (Source: Khmer Times)