Cambodia is expected to reach a GDP per capita of $1,220 this year, putting it on course to being a lower-middle income economy, said Commerce Minister Sun Chanthol, who was attending a meeting with Macau entrepreneurs in Phnom Penh yesterday.
Based on a Ministry of Economy and Finance projection, the figure will be a jump from the 2014 estimate that put the GDP per capita at $1,123 for last year.
Srey Chanthy, an independent economic analyst, said given Cambodia’s growth trajectory for the first half of this year – in particular agricultural and garment exports, tourism and construction – this projection “might be realistic”.
According to Chanthy, as long as income growth outpaced inflation the country could graduate to lower-middle income status soon.
“Cambodia will still receive good treatment in terms of trading arrangements, but it may see reduced grants from donors,” Chanthy said.
“Of course, it will be able to continue borrowing soft loans.”
Despite big improvements in alleviating poverty, latest figures show that Cambodia still has 17.7 per cent of its population below the 2012 poverty line of $1.20 per person per day, according to the World Bank.
In order to make this growth inclusive, Grant Knuckey, CEO of ANZ Royal Bank, said a skilled workforce will be needed to sustain development and not just “simply construction and consumption, which are big drivers currently”.
“Inclusive growth at this stage of Cambodia’s development is really about education and skills development rather than classic redistribution of wealth,” he added.
While Chanthol referenced GDP per capita estimates, the World Bank bases a country’s income status on the gross national income (GNI) per capita, which is a nation’s total income divided by its population.
In its forecast for 2015, it projected that Cambodia’s GNI per capita will be $1,096 making it a low-middle income economy, above the bank’s threshold of $1,045 per capita.
The outlook went on to say that this graduation will result in fewer grants and will require an enhanced use of loans with “a focus on quality monitoring for greater development impact”.
Keat Chhon, permanent deputy prime minister, said Cambodia was set to become a middle income country by 2030, and policies, like the Industrial Development Policy, will propel the country high-income status by 2050.
“The Industrial Development Policy is the main framework in creating value added into products of Cambodia, to make the sustainability of industry development by connecting of the supply chain in the region and the world as well as to mainly focus on development of agro-agriculture,” he said.
In its Cambodia Economic Update, the World Bank estimated that the Kingdom’s projected GDP growth will fall slightly to 6.9 per cent in 2015 from the 7 per cent it was estimated to grow in 2014.