The merchandise trade deficit will remain substantial in the forecast period, owing to Cambodia's reliance on imported capital goods. Even after economic growth recovers in the US, Cambodia's leading export market until 2009, garment manufacturers will struggle to compete with more efficient producers. There will be an increase in demand for imported trade-related services, such as insurance and freight, but the services account will remain in surplus, the result of increasing tourism revenue. The income deficit will narrow during the forecast period, owing to increased returns on Cambodia's holdings of foreign reserves. From the equivalent of an estimated 8% of GDP in 2010, we expect the current-account deficit to narrow to 6.9% of GDP on average in 2011-12.