Cambodia’s economy is projected to grow by 5.6 % this year, up from 5% compared to last year, boosted by a rise in garment exports and ongoing tourism recovery, said an ASEAN+3 Macroeconomic Research Office (AMRO) press release on Thursday.
“A rebound in the garment sector due to stronger demand in major markets and a robust tourism recovery will fuel Cambodia’s economic growth this year and into next year,” the press release said, adding that the growth for 2025 is forecast at 5.9%.
“The non-garment manufacturing sector is expected to sustain its strong growth momentum, supported by stable foreign direct investment (FDI) inflows,” it added.
The country’s growth traditionally relies on garment export, tourism, agriculture, as well as construction and real estate.
Cambodia’s path toward a strong economic recovery is confronted with external short-term risks and domestic vulnerabilities such as declining asset quality in the banking sector and a potential weakening of the real estate sector, the press release said.
“Rebuilding policy space, mitigating financial stability risks, and strengthening the supervision of the real estate sector is key to post-pandemic growth,” it said.
AMRO’s Chief Economist Hoe Ee Khor said Cambodia is among the countries with the fastest growth in the region.
“Growth in the garment sector is projected to rebound steadily this year, driven by stronger demand for consumer goods in major markets. Likewise, the non-garment sector is forecast to sustain its strong growth momentum, supported by stable foreign direct investment inflows,” he told Xinhua in a recent e-mail.
“A robust tourism recovery, fuelled by increased flight availability and the gradual return of foreign tourists, coupled with pent-up domestic consumption, will further bolster the ongoing improvement in the service sectors,” he said.
According to the press release, consumer price index inflation in Cambodia is expected to rise to 2.2% this year and 2.3% next year from 2.1% in 2023 due to higher domestic demand and a possible rebound in energy prices. Xinhua