Japanese-led multilateral lender Asian Development Bank (ADB) has revised its 2020 growth forecast for Cambodia to minus 4.0 per cent.
This is thanks to the Kingdom’s improved agricultural performance and an increase in volume in non-garment manufacturing exports such as bicycles and electronics, the ADB said.
In its annual flagship economic publication, the “Asian Development Outlook (ADO) 2020 Update”, the Manila-based lender lowered its June prediction of a 5.5 per cent contraction in Cambodia’s gross domestic product (GDP) this year to a smaller 4.0 per cent decline.
It said a sharp drop in orders from Europe and North America led to one-third of the Kingdom’s garment, footwear and travel goods factories shuttering during the first half of this year.
However, added production of bicycles and electronics pushed up the Kingdom’s non-garment manufacturing exports by 30.3 per cent year-on-year in the first half of this year, it said.
Total industrial output this year is projected to climb 5.1 per cent over last year if garment, footwear and travel goods exports remain on the recovery track, it added.
ADB country director for Cambodia Sunniya Durrani-Jamal noted that the Kingdom has been largely spared from the unprecedented global challenges caused by the ongoing health crisis.
She said: “We expect growth to rebound to 5.9 per cent in 2021, boosted by supportive government policies, social assistance for the poor and financing support for small- and medium-sized enterprises [SMEs].
“These measures, along with much-needed structural reforms, will reduce the direct and indirect impacts of Covid-19 on families and businesses, and help Cambodia’s economy emerge stronger from the pandemic.”
Cambodian bicycle exports totalled $241.7 million during the first half of this year, data from the General Department of Customs and Excise show.
More than half of the 1.1 million bicycles exported during the first half were sent to the EU. Other destinations for the bicycles included the US, Britain and Japan.
The Kingdom imported 192,397 bicycles totalling $4.34 million during the same period, the data showed.
Electrical equipment exports, including machinery and mechanical appliances, were valued at $264.89 million in the first four months of this year, up 33 per cent year-on-year from $198.51 million in the same period last year, the Ministry of Commerce reported.
The largest importers are Thailand, China, Japan and the US, it said.
Meanwhile, the Kingdom exported $3.784 billion worth of garment, textile and footwear (GTF) products in the first half, slipping 5.4 per cent from more than $4 billion in the same period last year, Ministry of Labour and Vocational Training spokesman Heng Sour said.
He said this at a press conference on the government’s Covid-19 response measures held at the Ministry of Economy and Finance on July 8.
The Kingdom exported goods to the tune of more than $7.01 billion in the first half, rising nearly three per cent year-on-year, the National Bank of Cambodia reported. Bicycle exports increased by 18 per cent in value.
“ADB is supporting the government’s response to the pandemic and has provided $250 million in concessional financing to strengthen health systems, expand social protection and support economic recovery,” it said.