Cambodia’s economic activity picked up in the first quarter of 2024, driven by a revival in exports of services and goods and despite subdued domestic demand, according to the World Bank’s Cambodia Economic Update released on Thursday.
Economic growth is expected to improve slightly to 5.8% in 2024 from 5.6% cent in 2023, and strengthen further to 6.1% in 2025 and 6.4% in 2026, as a revival in garment, travel goods and footwear exports, and tourism drive the ongoing recovery.
"To sustain economic growth, Cambodia needs to maintain macro-financial stability by restoring fiscal space and safeguarding the financial sector," said Maryam Salim, World Bank Country Manager for Cambodia.
Maryam Salim continued, "Cambodia can also strengthen competitiveness by improving the business climate, streamlining border trade procedures, increasing energy reliability, and strengthening education."
International tourist arrivals continued to improve in the first quarter, reaching 84 percent of pre-pandemic levels. Exports of apparel, travel goods and footwear rebounded, while non-apparel exports, particularly agricultural products, remained resilient.
The Association of Southeast Asian Nations (ASEAN) region has become Cambodia’s second-largest export market after the United States. Rising foreign investment in manufacturing and agriculture also contributed to the recovery.
Inflation fell to zero in March as food prices slowed, while the current account recorded an unprecedented surplus in 2023 as the trade deficit narrowed and tourism receipts rose.
However, construction activity remains subdued as the property market correction continues. As a result, domestic credit growth has slowed significantly, weighing on private consumption and domestic revenue collection.
Comments