The international and border trade value between Thailand and Cambodia plunged sharply in 1H09 due to the global crisis that had hit hard on the Cambodian economy since 2H08. During 6M09, international trade between the two countries –mostly being Thai exports to Cambodia – dropped 25.5 percent YoY, and localized cross-border trade had also declined 16.9 percent YoY. The trade overall and our surplus with Cambodia recorded lower values YoY. However, the decline in our imports from Cambodia was larger than that of our exports to them, thus maintaining a trade surplus with Cambodia in formal international and localized cross-border trade.
That frontier trade between Thailand and Cambodia has decreased at slower pace as compared to overall trade only because most Thai products shipped across the border are essential consumer goods for Cambodians, as well as some earmarked for transshipment to Vietnam and southern China.
KASIKORN RESEARCH CENTER (KResearch) forecasts that the trade between Thailand and Cambodia will show a more promising trend in 2H09. In fact, the Cambodian economy is expected to experience a 0.5-percent contraction in 2009 – the first time in several years. However, the stabilizing global economy in 2H09 may help boost Cambodian exports, especially to the US and European Union – their key markets – which would be a plus to the Cambodian economy over the remainder of 2009. Nonetheless, downsides to that include the renewed tensions along the Thai-Cambodian border as a result of the reemergence of the Preah Vihear border conflict in late June 2009 and the real estate bubble in Cambodia that may jeopardize their economic stability.