Cambodia's Economy to Accelerate at 5.5% in 2023 on Tourism Recovery — ADB
05/04/23 15:04

Phnom Penh (FN), Apr. 4 – Cambodia’s economy is forecast to grow at 5.5% in 2023 and 6.0% in 2024 on a more robust tourism recovery and higher growth in the services sector, according to the Asian Development Bank (ADB) seen by Fresh News on Tuesday (Apr 4).

"Despite weaker global demand, Cambodia’s economy continued to perform well in 2022 led by ongoing tourism recovery. Cambodia’s economic outlook is positive with robust growth, shrinking current account deficit and moderate inflation in 2023," said ADB country director for Cambodia Jyotsana Varma.

The Asian Development Outlook (ADO) April 2023 says the tourism sector is expected to grow 7.3% in 2023 before easing to 6.8% in 2024. Inflationary pressure is anticipated to moderate at an average rate of 3.0% in 2023 and 4.0% in 2024. Cambodia’s economic outlook also hinges on the country’s continuing efforts to scale up green investment to unlock long-term growth potential, says the report.

The ADO April 2023 report says Cambodia’s economy grew by an estimated 5.2% in 2022, owing primarily to rising external demand for Cambodian products and tourism services, which led to a revival of demand for food and accommodation, and growth in local trade, transport, and communications subsectors. With improved confidence in travel and removal of mobility restrictions, international visitor arrivals staged a strong rebound to about 2.3 million in 2022 from a low base of about 200,000 in 2021. Growth in agriculture, however, decelerated in 2022 due to higher prices for fuel and other agricultural inputs.

Growth in exports of garments, footwear, and travel goods is projected to decelerate due to weak external demand in the United States and Europe, the main export destinations. The industrial sector, however, continues to benefit from policy reforms including the investment law 2021 which created a one-stop service for investors, and new trade agreements.

Industrial output is expected to grow by 5.8% in 2023 before accelerating to 7.8% in 2024. Growth in construction is expected to remain slow. Agriculture is forecast to grow 1.1% this year and 1.2% in 2024, boosted by crop production for exports.

"Risks to the outlook include weaker growth in the United States and Europe, high level of private debt, less-than-expected growth of tourist arrivals and foreign direct investment from the People’s Republic of China, high energy prices, and extreme weather events affecting agriculture productivity," added Varma.

ADB is implementing USD 2.4 billion of investment projects in Cambodia, with average annual lending of more than USD 350 million from 2016 to 2022.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
=FRESH NEWS

IMF Reiterates Need for Cambodia to Diversify Markets as U.S. and European Economies Slow
AKP Phnom Penh, April 14, 2023 --

The International Monetary Fund (IMF) reiterated Friday that Cambodia had to diversify its export markets to cope with slower economic growth in the United States and Europe.

Krishna Srinivasan, director of the IMF’s Asian and Pacific Department, told a news conference in Washington that “those two markets are clearly affecting Cambodia's growth.”

A one percent decline in U.S. growth "leads to an 0.5 percent decline in Cambodia's growth,” he said.

“These are clear headwinds for Cambodia's growth prospects. Now, one needs to diversify your trading partners and where you export.”

Cambodia’s free-trade agreements with China and South Korea as well as the Regional Comprehensive Partnership (RCEP) are “providing an opportunity to diversify your export markets,” Srinivasan said.
Long read: https://www.akp.gov.kh/post/detail/275970

World Bank raises Cambodia’s 2023 growth forecast to 5.5 pc
By News desk -
May 19, 2023
The World Bank on Thursday raised its growth forecast for Cambodia to 5.5 percent in 2023, up from its earlier projection of 5.2 percent.

“Driven by pent-up consumer demand and the return of foreign tourists, the overall contribution of the services sector to economic growth is returning to the 2019 levels,” Maryam Salim, World Bank country manager for Cambodia, said during the launch of the May 2023 Cambodia Economic Update.

“Meanwhile, the agriculture sector is benefitting from improved access to regional markets, thanks to newly ratified bilateral and regional free trade agreements,” she added.—Xinhua

NBC: Cambodia Forecasts Growth at 5.5 Percent in 2023
AKP Phnom Penh, July 06, 2023 --

The National Bank of Cambodia (NBC) has forecast the country’s economic growth at 5.5 percent in 2023, with an expected yearly inflation rate at 2 percent, but external risks may affect the economic growth.

The growth forecast was unveiled in a seminar on Financial Stability Review held on July 6 at the NBC’s Centre for Banking Studies, in the presence of NBC’s Deputy Governor H.E. Mrs. Chea Serey with the participation of public and private stakeholders in the financial sector, banking and financial institutions, development partners, research institutes and universities.

In her opening remarks, H.E. Mrs. Chea Serey said that the main potential risks stem from external factors due to economic openness, as well as the strong dependence of the Cambodian economy on external sector.

Along with external risks, potential internal risks also need to be considered and monitored, which can arise from the real estate sector, she said, adding that the global and domestic economic slowdown due to the Covid crisis and the recovery in uncertain conditions have led to a steady decline in demand in the sector.

“Faced with this uncertainty, the NBC has been implementing crisis relief measures by carefully restructuring its regulatory framework to strengthen the resilience of the banking system while assisting priority sectors such as SME and the agriculture sector during the economic recovery,” she said.

Additionally, maintaining financial stability is an inter-sectoral task that requires the cooperation and coordination of both authorities and stakeholders, as the financial system is closely related, both within the financial sector and with the economy, the NBC’s deputy governor said.

Cambodia’s economic growth in 2022 was estimated at 5.2 percent, supported by export growth, resumption of domestic economic activities, and rapid recovery of tourism.
AKP

World Bank Projects Cambodia's 2023 Growth at 5.5 Percent
AKP Phnom Penh, October 2, 2023 --

The World Bank on Monday projected its growth forecast for Cambodia to 5.5 percent in 2023, thanks mainly to the revival of the services sector and improvements in agricultural production.

According to the World Bank’s East Asia and Pacific Economic Update, given the relatively fast pace of growth, the pace of poverty reduction is expected to accelerate. Downside risks include weaker-than-expected global demand, a protracted period of tighter global financial conditions, and/or a renewed oil and food price shock.

The tourism and hospitality industries are likely to accelerate further, with a projected increase in international arrivals, while exports and foreign direct investment inflows are expected to be strengthened by the newly ratified free trade agreements, a substantial increase in private and public investment in key physical infrastructure, and structural and sectoral reforms.

The Regional Comprehensive Economic Partnership agreement and other free trade have given a boost to the Kingdom's economic growth, said Aaditya Mattoo, chief economist of the World Bank’s East Asia Pacific Region.

“Certainly the RCEP agreement by creating greater predictability of market access and by inducing some reforms in Cambodia's own policies can be expected to help both to generate new trade and new investment flows and hopefully to help Cambodia in its goal of diversifying its economy and its exports which have been heavily reliant on garment so far,” he said during a video press conference on the launch of the World Bank’s East Asia and Pacific Economic Update, on Monday.

In 2024, the economy is expected to improve further, growing at 6.1 percent as goods exports are projected to also improve and gradually diversify, while FDI inflows will likely be boosted by the new Law on Investment, said the report.

Over the medium term, the economy is expected to trend back to potential, growing at 7 percent, read the report.
- AKP