WB predicts Kingdom to grow at 5.8% in 2024

WB predicts Kingdom to grow at 5.8% in 2024

Despite subdued domestic demand, the Kingdom’s economy will grow at 5.8 percent this year, 6.1 percent in 2025 and 6.4 percent in 2026, a rise of three percent annually for the next two years, driven by a revival of services and goods exports, the World Bank said in a report.

World Bank launched the first quarter report of ‘Cambodia’s Economic Update’ (CEU) at Raffles Hotel Le Royal Phnom Penh, yesterday. The event was presided over by Maryam Salim, World Bank Country Manager for Cambodia.

Addressing the opening ceremony, Salim said that to sustain economic growth, the Kingdom needs to maintain macro-financial stability by restoring fiscal space and safeguarding its financial sector.

She continued, “Cambodia can also strengthen competitiveness by improving the business climate, streamlining trade procedures at borders, making the energy supply more reliable and strengthening the education system.”

According to the CEU report titled Cambodia’s Export Revival and Trade Shifts, “The economic growth is expected to improve marginally to 5.8 percent this year, up from 5.6 percent last year and should further strengthen by 6.1 percent in 2025 and reach 6.4 percent in 2026 as the revival in the garments, travel goods, and footwear exports along with tourism propel the ongoing recovery.”

International tourist arrivals continued to increase in the first quarter this year to 84 percent of pre-pandemic levels as well as the exports of garments, travel goods, and footwear have also rebounded especially the agricultural commodities that remained resilient, it said.

The Association of South Asian Nations (ASEAN) region has emerged as Cambodia’s second-largest export market after the United States (US) and the rise of foreign investment in manufacturing and agriculture contributed significantly to the recovery, the report said.

The seminar also provided a panel discussion on how to strengthen the education system in Cambodia which was chaired over by Oung Borat, Secretary of State of the Ministry of Education Youth and Sport along with Hiroyuki Hattori, Chief of Education of UNICEF Cambodia and Dr Leng Phirom, Technical Advisor to Economic, Social and Cultural Council of the Office of the Council of Ministers (OCM).

The seminar offered several policy recommendations such as priority spending on early childhood education and primary schooling, enhancing teaching effectiveness through comprehensive teacher management, ensuring equitable distribution of resources across regions and schools, investing in interventions to mitigate learning losses due to Covid-19, strengthening the capacity of education authorities for improved budget planning and fostering partnership among stakeholders.

In his comments on the report, Lor Vichet, Vice President of Cambodia Chinese Commerce Association told Khmer Times, “Cambodia has to fully capitalise on the current comparative advantages that we currently enjoy as a Least Developed Country (LDC) that has preferential trade status like zero duties for some categories of exports from the Kingdom to the European Union and the United States before our eventual graduation from LDC in the coming years.”

“The nation will benefit enormously from elevated trade ties with both the United States and China if we can formulate timely and pragmatic trade strategies whilst fostering a more equitable and fair business environment that benefits all stakeholders,” he said.

For foreign investors who are keen on expanding their market presence overseas, Cambodia often pops up and ends up as a preferred investment destination amidst the ongoing trade volatility and rising geopolitical tensions within the region, Vichet added.

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