World Bank Forecasts 5.8 Percent Economic Growth for Cambodia in 2024
Strong Exports and Services Fuel Economic Recovery
According to the World Bank's latest Cambodia Economic Update, released on June 6, Cambodia's economy is expected to grow by 5.8 percent in 2024, driven by strong performances in goods exports and services.
The report highlights that Cambodia's economic activities have accelerated in the first quarter of 2024, primarily due to a resurgence in service sectors and goods exports, despite somewhat sluggish domestic demand.
World Bank Country Manager for Cambodia, Maryam Salim, emphasized the importance of maintaining macro-financial stability to sustain economic growth. "Restoring fiscal space and ensuring the financial sector's stability are crucial. Additionally, enhancing competitiveness through improvements in the business environment, simplifying trade processes at borders, ensuring reliable energy supplies, and bolstering education will further strengthen the economy," Salim stated.
The report also noted a significant recovery in international tourism, reaching 84 percent of pre-pandemic levels in the first quarter. It mentioned that while exports of garments, travel goods, and footwear have seen a robust rebound, non-garment exports, particularly agricultural products, have shown resilience.
The ASEAN region now ranks as Cambodia's second-largest export market, following the United States. Increased foreign investments in manufacturing and agriculture have also played a key role in this economic recovery.
Inflation rates dropped to zero in March due to slowing food prices. Additionally, Cambodia recorded an unprecedented current account surplus in 2023, attributed to a narrowing trade deficit and increased tourism revenues.
However, the report points out that the construction sector remains muted, continuing the correction in the property market. This adjustment has led to a significant slowdown in domestic credit growth, impacting private consumption and domestic revenue collection.
Looking ahead, the World Bank projects Cambodia’s economic growth to further accelerate to 6.1 percent in 2025 and 6.4 percent in 2026, driven by continued strength in garment, travel goods, and footwear exports along with a recovery in the tourism sector.
The report highlights that Cambodia's economic activities have accelerated in the first quarter of 2024, primarily due to a resurgence in service sectors and goods exports, despite somewhat sluggish domestic demand.
World Bank Country Manager for Cambodia, Maryam Salim, emphasized the importance of maintaining macro-financial stability to sustain economic growth. "Restoring fiscal space and ensuring the financial sector's stability are crucial. Additionally, enhancing competitiveness through improvements in the business environment, simplifying trade processes at borders, ensuring reliable energy supplies, and bolstering education will further strengthen the economy," Salim stated.
The report also noted a significant recovery in international tourism, reaching 84 percent of pre-pandemic levels in the first quarter. It mentioned that while exports of garments, travel goods, and footwear have seen a robust rebound, non-garment exports, particularly agricultural products, have shown resilience.
The ASEAN region now ranks as Cambodia's second-largest export market, following the United States. Increased foreign investments in manufacturing and agriculture have also played a key role in this economic recovery.
Inflation rates dropped to zero in March due to slowing food prices. Additionally, Cambodia recorded an unprecedented current account surplus in 2023, attributed to a narrowing trade deficit and increased tourism revenues.
However, the report points out that the construction sector remains muted, continuing the correction in the property market. This adjustment has led to a significant slowdown in domestic credit growth, impacting private consumption and domestic revenue collection.
Looking ahead, the World Bank projects Cambodia’s economic growth to further accelerate to 6.1 percent in 2025 and 6.4 percent in 2026, driven by continued strength in garment, travel goods, and footwear exports along with a recovery in the tourism sector.
Translation:
Translated by AI