Phnom Penh (FN), Apr. 11 – Cambodia’s economy is forecast to grow at 5.8 per cent in 2024 and 6.0 per cent in 2025, fueled 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 today.
"Despite global economic challenges, Cambodia’s economy performed well in 2023,” said ADB Country Director for Cambodia 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 per cent 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 per cent in 2023 mainly on falling global energy prices, to remain low at around 2.0 per cent 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 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 mobilization.
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
