Cambodia’s economy recovers well in 2022, with better growth forecast for next year despite headwinds
Newly-ratified free trade agreements, namely the Regional Comprehensive Economic Partnership and the Cambodia-China Free Trade Agreement (CCFTA), have helped boost Cambodia’s agriculture and agro-processing industries, said World Bank senior country economist Ly Sodeth.
Cambodia’s economy has recovered well from the impact of COVID-19 in 2022, with better performance being expected for 2023, said a government official recently.
Thanks to rising global demand, foreign investors’ confidence, and a full reopening of borders, Cambodia is expected to see 5.4 percent economic growth this year and 6.6 percent next year, said Economy and Finance Minister Aun Pornmoniroth during a 2023 budget law debate in late November.
The GDP per capita was expected to rise to $1,785 in 2022 and would be further up to $1,924 in 2023, Pornmoniroth, who is also a deputy prime minister of the country, told the parliament.
The economy of the Southeast Asian country has mainly been driven by garment exports, construction and real estate, tourism and agriculture.
According to Pornmoniroth, in 2023, industrial sector, mainly garment and construction, is predicted to grow by 9.2 percent, while service sector, mainly tourism, transport, telecom, trade and real estate, is expected to increase by 6.6 percent, and agriculture are projected to rise by 1.1 percent.
The country’s inflation is expected to go down to 2.5 percent in 2023 from 5 percent in 2022, he added.
Pornmoniroth’s words was echoed by World Bank senior country economist Ly Sodeth, who said Cambodia’s economy is recovering well after the COVID-19.
“The surge in manufacturing exports-especially garment, footwear, travel goods, and bicycle manufacturing; the revival of the travel and tourism industries; and the return of foreign direct investment inflows have helped sustain economic recovery in 2022,” Sodeth said during the launch of the World Bank’s Cambodia Economic Update in Phnom Penh last week.
“Over the medium term, the economy is expected to trend back to potential, growing at around 6 percent,” he added.
Sodeth said that newly-ratified free trade agreements, namely the Regional Comprehensive Economic Partnership and the Cambodia-China Free Trade Agreement (CCFTA), have helped boost Cambodia’s agriculture and agro-processing industries.
“The CCFTA is expected to also attract more foreign investors, especially Chinese ones, to the country,” he said. Xinhua