NBC Predicts Healthier Economic Growth in 2024

NBC Predicts Healthier Economic Growth in 2024

PHNOM PENH, May 23, 2024 — The National Bank of Cambodia (NBC) has forecasted a healthier economic growth rate and a decline in inflation for Cambodia in 2024, despite global economic challenges stemming from geopolitical tensions and rising interest rates.

In its latest report issued on Monday, the central bank projected that Cambodia’s Gross Domestic Product (GDP) will expand by a robust 6 percent in 2024, supported by improved external and domestic conditions. The IMF has predicted global growth at 3.2 percent this year, higher than previous forecasts, due to greater-than-expected resilience in the U.S. and faster economic recovery in China, which are also Cambodia’s main trading and investment partners, the central bank stated.

“The Cambodian economy is supported mainly by exports of both garment and non-garment products, an increase in the tourism sector and related industries, while the agricultural sector grows at a slower pace,” said NBC Governor Dr. Chea Serey during the launch of the Financial Stability Review 2023 on May 20.

“The Regional Comprehensive Economic Partnership (RCEP) and other Free Trade Agreements (FTAs) could attract more FDIs and help Cambodia diversify its production and exports,” she added.

The report acknowledged potential challenges, including geopolitical tensions, prolonged tightening of monetary policies in advanced countries, weaker-than-expected growth in China, and climate change. These risks could slow global economic and trade activities, affecting exports, investment, and capital flows into Cambodia.

Dr. Chea Serey highlighted the resilience of Cambodia’s banking system amid successive external challenges. “Facing these potential challenges, the NBC will continue to collaborate with relevant authorities to ensure the strength of Cambodia’s banking system and will introduce necessary measures to support economic growth and maintain national financial stability,” she said.

Cambodia’s economic growth is primarily driven by garment exports, tourism, agriculture, as well as construction and real estate. The NBC predicted that inflation in Cambodia will remain low and manageable. The inflation rate, which peaked at 2.1 percent in 2023 due to rising global fuel and food prices, is projected to fall to 2 percent by the end of the year.

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