IMF says RCEP, CCFTA support Cambodia’s growth over medium term

The International Monetary Fund (IMF) said on Monday that the Regional Comprehensive Economic Partnership (RCEP) trade pact and the Cambodia-China Free Trade Agreement (CCFTA) will support Cambodia’s economic growth over the medium term.

The Cambodian economy is projected to grow at 5 percent in 2022 and nearly 5.5 percent in 2023, reflecting external pressures and some drag from real estate and construction, the IMF said in its latest report.

The strong economic recovery from the pandemic is supported by the country’s strong economic buffers and robust crisis response, the report added.

Growth is expected to increase to over 6 percent in 2024, and to gradually return to trend growth rates of around 6.5 percent over the medium term, it said, adding that inflation is expected to reach 5.8 percent this year before decelerating to 3.5 percent next year.

“Although the COVID-19 crisis will have some lingering effects, the authorities’ ongoing reforms (e.g. the investment law that creates a single contact point for investors) and new trade agreements (RCEP and an FTA with China) will support growth over the medium term,” the IMF said.

Both the RCEP and the CCFTA entered into force in January 2022.

The RCEP comprises 15 Asia-Pacific countries including 10 ASEAN member states, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their five trading partners – China, Japan, South Korea, Australia and New Zealand.