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Cambodia: Key sectors to support 2023 growth projection
To achieve the projected growth rate of 6.6 percent in 2023 and take the gross domestic product (GDP) to 131,276 billion riels or about $32,291 million, the Cambodian economy will have to be supported by key economic sectors.
The industrial sector is projected to grow at 9.2 percent in 2023, similar to the 2022 growth rate of 9 percent due to the strong resumption of growth in the garment sub-sector and non-garment manufacturing.
The services sector is projected to grow at 6.6 percent in 2023 from 4.3 percent in 2022 due to the continued recovery of domestic economic activity, especially the hotel and restaurant sub-sector and tourism.
The hotel and restaurant sub-sector may continue the recovery trend due to the expected arrival of a larger number of international tourists. Domestic tourist numbers are also expected to grow at a faster pace.
The agricultural sector may achieve a 1.1 percent expansion in 2023 over 0.7 percent achieved in 2022 on the expectations of maintaining good growth in the crop and livestock sub-sectors. The fishing sub-sector is also expected to recover next year.
Annual average inflation may rise to 2.5 percent in 2023 on the expectations of a return to the normal trend in international oil prices. However, unexpected price issues due to supply shocks could keep inflation on the higher side.
The riel exchange rate is expected to remain stable at around 4,065 riel per US dollar in 2023 due to the continued implementation of the National Bank of Cambodia’s riel promotion measures and the continued strengthening of cash management policies in the financial sector.
The current account deficit (including diversion) may shrink to 14.1 percent of GDP in 2023 due to expectations of continued growth in exports and tourism revenue.
Total international reserves are expected to increase to $22,149 million by 2023.
Hong Vannak, an economic analyst at the Royal Academy of Cambodia, told Khmer Times, “If we look at the growth in 2022, there will be a big increase due to the export of agricultural and industrial products.”
The export of garments, footwear, and bags has registered a slight decline, but orders for bicycles, plywood, and furniture processing have increased significantly.
“Overall, the international trade sector has grown, so the growth in 2023 will help create economic resources. Cambodia’s economy continues to grow. Domestic tourism is growing rapidly in Siem Reap, Sihanoukville, and the Northeast. The number of international tourists has increased from 500,000 to 600,000.” he said.
Source: https://www.khmertimeskh.com/501177681/key-sectors-to-support-2023-growth-projection/