Cambodia has topped a recent global index produced by the UK-based business publication, fDi Intelligence. The nation ranked as the best emerging market worldwide for foreign investment in 2024.
Cambodia has taken the number one place in the 2024 index on account of its strong and consistent gross domestic product (GDP) growth, low inflation rate, and swift growth in the foreign direct investment (FDI) sector.
The fDi Intelligence emerging markets index also considers factors such as infrastructure development, policy incentives for investors, and the overall capabilities of cities and regions in attracting future inward commercial investment.
The fDi Intelligence emerging markets report surveys regions including Asia-Pacific, Europe, North America, Latin America and the Caribbean, Middle East and Africa, and BRICS nations.
According to the report, Cambodia, in first place, is on track for 6.1 percent GDP this year, with a low inflation rate of just 3 percent.
Meanwhile, Cambodia has seen a whopping 393 percent increase in FDI capital expenditure in-country, and 110 percent growth in new FDI projects.
The report also identified the country’s proactive state policy on foreign investment which has driven growth in FDI.
According to the report, the Cambodian government has implemented a host of conducive policies to ease foreign business startups, enhance commercial infrastructure, and generally provide suitable conditions for private investors.
Cambodia’s growing tourism market was also noted as an attractive aspect of the market and a sector witnessing a strong rebound in 2024, with expectations for this trend to continue.
In 2023, tourist arrivals reached upwards of five million and only around 20 percent short of pre-pandemic levels. The tourism sector is therefore responsible for around 10 percent of all national GDP, and is set to continue its growth in coming years.
fDi Intelligence also commended Cambodia’s progress in economic diversification since 2019, a good sign that the economy is reducing reliance on traditional trade strengths, most significant being the export of garments and footwear.
The report noted that non-garment exports now account for 13 percent of all exports as of 2023, such as electronic components and vehicle parts production.
In comparison to previous periods, non-traditional products previously only represented a 5 percent share of exports in 2019.
The report noted that such diversification increases the economy’s resilience to global demand shifts, and improves the markets potential for new investments.
While positive overall, the index noted that the Cambodian economy does show some potential risks and challenges in the near future, especially in the real estate sector.
If this sector loses momentum, knock on effects may impact the banking sector and economy at large, the report warned.
However, diversification in terms of the sources of capital investments should mitigate such risks, noted the report.
These factors combined suggest that Cambodia is a hot ticket for potential investors in 2024 and coming years, and the leading emerging market in the global survey.
Coming in second place, the Philippines demonstrated GDP growth of 5.9 percent, along with a sizable 312 percent increase in FDI capital expenditure.
Other up and coming emerging markets in the index’s top ten includes nations from Africa, Asia and the Middle East including Kenya, Iraq, Namibia, Kazakhstan, Azerbaijan, Morocco, Serbia and India.
Founded in 2001, and headquartered in London, England, fDi Intelligence is a business news and foreign direct investment (FDI) publication, providing an up-to-date review of global investment activity.
The fDi Intelligence publication is a subsidiary of the renowned Financial Times. (khmertimeskh)