Tourist arrivals, garments may lift Cambodia economy

PHNOM PENH, Tourist arrivals in Cambodia rose in July after dipping slightly in the first half, and garment sales to Asia are picking up, officials said on Friday, suggesting a slump in the economy might be contained.

The International Monetary Fund has forecast the economy would shrink 0.5 percent this year after expanding 5.5 percent in 2008, which was a sharp slowdown from four years of double-digit growth.

The number of tourists visiting the country in the first six months of 2009 dropped 1.1 percent from last year to 1.08 million, but in July arrivals rose 13 percent from a year before to 106,528, according to tourist ministry data.

"I can see the worst is over for Cambodia's tourist industry and we will see more tourist arrivals from now on," Deputy Minister for Tourism So Mara told Reuters.

The country is aiming to welcome 2.25 million tourists in 2009 after 2.2 million last year.
Officials were also taking heart from the breakdown of data from the garment industry, Cambodia's biggest export sector.

Garment exports in the first six months dropped 24 percent from last year to $1.1 billion.
However, exports to Asian markets rose 18 percent to $56.74 million in that period and those to Japan alone doubled to $9.61 million, according to a commerce ministry report.

"Although the increase in demand from Asian markets is small, it is a positive sign of recovery for us," Mean Sophea, head of the commerce ministry's external trade department, told Reuters.
Garments are Cambodia's biggest export earner, bringing in $2.78 billion last year. The authorities expect a drop of 30 percent this year.

Garment factories mushroomed earlier this decade and in 2005 there were about 270.
That figure had dropped to around 140 after factories closed because of the global economic crisis, according to the Garment Manufacturers Association of Cambodia (GMAC), but 26 new factories have opened this year, a sign of recovery.