The Asian Development Bank (ADB) on April 4 pegged the Kingdom’s economic growth at 5.5 per cent for this year “on a more robust tourism recovery and higher growth in the services sector”.
The Metro Manila-based multilateral lender presented the forecast in its April 2023 Asian Development Outlook (ADO) and an accompanying statement. This matches the figure offered by a senior official in late January, and is slightly higher than the 5.2 per cent recently put forth by the World Bank (WB).
“Cambodia’s economy grew by an estimated 5.2 per cent in 2022, owing primarily to rising external demand for Cambodian products and tourism services, which led to a revival of demand for food and accommodation, and growth in local trade, transport, and communications subsectors,” the statement said.
The ADB surmised that economic growth will be strongly influenced by the tourism sector, which it predicted could grow by 7.3 per cent this year, with industrial output declining to 5.8 per cent, compared to over 8.3 per cent in 2022, “before accelerating to 7.8 per cent in 2024”.
“Growth in construction is expected to remain slow. Agriculture is forecast to grow 1.1 per cent this year and 1.2 per cent in 2024, boosted by crop production for exports,” the statement said.
At a press conference on the ADO, ADB Cambodia Resident Mission (CARM) senior economics officer Doung Poullang commented that mainland China’s reopening would push demand and growth in the construction sector, following its sluggish performance as of late.
The 32nd Southeast Asian (SEA) Games and the 12th ASEAN Para Games in May-June as well as the general election in July will stimulate consumption, he suggested.
The ADB statement added that “inflationary pressure is anticipated to moderate at an average rate of 3.0 per cent in 2023 and 4.0 per cent in 2024”.
ADB country representative Jyotsana Varma added in the statement: “Despite weaker global demand, Cambodia’s economy continued to perform well in 2022 led by ongoing tourism recovery.
“Cambodia’s economic outlook is positive with robust growth, shrinking current account deficit and moderate inflation in 2023.”
“Risks to the outlook include weaker growth in the United States and Europe, high level of private debt, less-than-expected growth of tourist arrivals and foreign direct investment from the People’s Republic of China, high energy prices, and extreme weather events affecting agriculture productivity,” she said.
The statement added that the Kingdom’s economic outlook “also hinges on the country’s continuing efforts to scale up green investment to unlock long-term growth potential”.
The World Bank (WB) very recently projected economic growth for Cambodia at 5.2 per cent in 2023, crediting China’s economic reopening, but noted that regional economies could be hurt by “slowing global growth, elevated commodity prices, and tightening financial conditions in response to persistent inflation”.
“Growth in developing East Asia and the Pacific [EAP] is forecast to accelerate to 5.1 per cent in 2023 from 3.5 per cent in 2022, as China’s reopening helps the economy rebound to a 5.1 per cent pace from three per cent last year,” the multilateral lender said in a March 30 statement.
The Washington-based institution defines the developing EAP region as the 10-nation ASEAN’s eight largest countries – Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam – along with China, Mongolia, Papua New Guinea, Timor-Leste, and the Pacific island countries.
On January 25, Ministry of Economy and Finance permanent secretary of state Vongsey Vissoth revealed that the government had revised down its 2023 growth forecast for the Cambodian economy to 5.6 per cent versus the 6.6 per cent it put forth in October, citing uncertainty about global economic growth tied to the Ukraine conflict, climate change and the Covid-19 crisis.
