Cambodia Kickstart
Cambodia’s economy is forecast to grow at 5.8 percent in 2024 and 6.0 percent in 2025, fuelled by a further rebound in tourism and strong manufacturing prospects.
ADB: Cambodia’s positive momentum
By C. Nika, AKP Phnom Penh
Cambodia’s economy is forecast to grow at 5.8 percent in 2024 and 6.0 percent in 2025, fuelled by a further rebound in tourism and strong manufacturing prospects, according to the latest edition of the Asian Development Bank’s (ADB) flagship economic report released on April 11.
"Despite global economic challenges, Cambodia’s economy performed well in 2023,” said ADB Country Director for Cambodia Ms. Jyotsana Varma. “We expect growth to be robust in 2024-2025, with the garments, footwear, and travel goods (GFT) sector poised for a significant upturn building on the positive momentum during the last quarter of 2023.”
The Asian Development Outlook (ADO) April 2024 estimated growth of 5.0 percent in 2023, driven by a robust recovery in tourism and solid activity in manufacturing outside the GFT sector. The report forecasts continuing economic expansion in 2024–2025, supported by stronger export-oriented manufacturing. It also expects inflation, which averaged 2.1 percent in 2023 mainly on falling global energy prices, to remain low at around 2.0 percent over the next two years.
The government aims for gradual fiscal consolidation from 2024 to rebuild pandemic-diminished reserves. Yet, challenges such as potential global economic slowdowns, rising private debt, fluctuating energy prices, and climate vulnerabilities could impact the outlook longer-term.
“These challenges add layers of complexity to Cambodia’s economic narrative,” said Ms. Varma. “But, the country is moving ahead with cautious optimism.”
The report also discusses Cambodia’s strategic preparations to graduate from the least-developed country (LDC) category, as designated by the United Nations, in 2027. It notes that graduation will improve the country’s international standing and investment attractiveness, but simultaneously pose challenges from reduced access to concessional financing and preferential trade treatments that propel sectors contributing to high growth and employment.
To effectively navigate this transition, the report stresses the importance of Cambodia enhancing its global economic integration, diversifying markets, focusing on higher value-added products, investing in sustainable infrastructure and human capital, and strengthening domestic resource mobilisation.
Recently, Cambodia was ranked by Seasia Stats as the fastest growing economy in Southeast Asia, and third in Asia in 2024 by basing on the International Monetary Fund (IMF)’s October 2023 Outlook and January 2024 update, which forecasted Cambodia’s economic growth at 6.1 percent this year.
For the government side, Cambodian economy remains robust with a projected growth rate of 6.6 percent in 2024, up from 5.6 percent last year, while the World Bank has forecasted that the Kingdom’s economy would grow at 5.8 percent this year.
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Cambodia Q1 Exports US$6.2 Billion
By AKP Phnom Penh
Cambodia’s total exports topped US$6,261 million in the first quarter (Q1) of this year, up 18 percent compared to the same period last year, a report of the General Department of Customs and Excise showed on Wednesday.
The United States and Vietnam are the Kingdom’s top exporting destinations with shipment amount at US$1,985 million and US$1,392 million, up 8.9 percent and 53 percent, respectively, read the report.
The Regional Comprehensive Economic Partnership (RCEP) agreement and the free trade agreements with China and Korea have played important roles in promoting Cambodia-made products and contributed to attracting new foreign investment, said H.E. Penn Sovicheat, Secretary of State and Spokesperson at the Ministry of Commerce.
“Cambodia’s exports to the international market, particularly RCEP member states, have remarkably increased, making Cambodian products attractive in the long term,” he underlined.
RCEP, Cambodia-China FTA, and Cambodia-Korea FTA came into force in 2022.
Mr. Lim Heng, Vice President of the Cambodia Chamber of Commerce, attributed the country’s export growth to huge potential of markets under the trade pacts and trade preference schemes.
“Free trade agreements, mega-regional pact, and trade preference schemes in the EU and US are potential for Cambodia’s products and are catalysts in attracting new investment for manufacturing products for exports,” he added.
The garment, footwear and travel goods industry is the largest foreign exchange earner for Cambodia. The sector consists of roughly 1,133 factories and branches, employing approximately 840,000 workers, mostly female.
Meanwhile, Cambodia’s total imports rose by 6.4 percent to US$6,234 million, the report pointed out.
The country primarily imports raw and construction materials, automobiles, pharmaceuticals, electronic equipment, fertilisers and pesticides.
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