Logo of Phnom Penh Post newspaper Phnom Penh Post - Economic outlook positive, ease of doing business still lagging: ADB

Economic outlook positive, ease of doing business still lagging: ADB

Workers prepare clothing for export at a garment factory in Phnom Penh in 2013.
Workers prepare clothing for export at a garment factory in Phnom Penh in 2013. Pha Lina

Economic outlook positive, ease of doing business still lagging: ADB

Cambodia’s economic outlook remains positive and the economy is forecast to grow at a robust 7 percent this year and next year, according to a report released by the Asian Development Bank (ADB) on Wednesday.

Growth in exports, strong foreign direct investment, growing tourist arrivals and increasing domestic demand should promote strong growth for the next two years, according to the bank’s Asian Development Outlook report.

Potential risks to the Kingdom’s growth remain, however, including the upcoming national elections in July, as well as the persistent difficulty of doing business in the country.

“Rising wages require that other costs of doing business be cut to maintain competitiveness with peer economies,” the report says. “Great potential exists in simplifying cumbersome business procedures.”

The report also calls for an improvement to the judicial system, which “is not seen as effective in resolving commercial disputes”.

Seang Thay, a spokesman at the Commerce Ministry, said yesterday the ADB’s outlook reflected the positive improvement of Cambodia’s economy. He also agreed with the need for further reforms to maintain competitiveness.

“We acknowledge that we need to try more to improve the procedure to provide easiness for business to do business in our country,” he said.

He encouraged patience, noting that the government would get better over time and keep improving.

Jan Hansen, the ADB’s senior country economist, reiterated the call for judicial reforms during the report’s presentation yesterday.

“What I think would be important is the establishing of commercial court,” he said. “The capacity building of judges and the commercial court would also help a lot to improve.”

Asked about a commercial court on Wednesday, Thay said that while it was an important step, further discussion with “relevant stakeholders” needed to take place. He also said that the National Commercial Arbitration Centre already existed for commercial disputes.

The spokesman declined to release any timeframe for possible implementation of a commercial court.

The ADB’s report also noted that garment and footwear exports were likely to slow in the future, but predicted that would be offset by strong growth in emerging industries, such as electrical parts and automobile components.

Higher demand for imports is set to increase the country’s trade deficit, however the bank expects increased tourism to bring in enough revenue to cushion the rise.

Meanwhile, higher foreign direct investments and official concessionary loans from abroad should be more than adequate to finance the current account deficit, even building up foreign reserves to about $10 billion by the end of the year.

MOST VIEWED

  • Temi tourism project approved by the CDC

    The $500.4 million Tourism, Ecological, Marine and International (Temi) tourism project has been approved by the Council for the Development of Cambodia (CDC), according to a notice on its Facebook page on Monday. The project is part of Chinese-owned Union City Development Group Co Ltd’s (

  • Rainsy will return at ‘favourable time’

    Opposition figure Sam Rainsy on Saturday suggested he would not return to Cambodia as he had previously promised, saying that like liberators King Father Norodom Sihanouk and Charles de Gaulle, he would only do so at a “favourable time”. “I will go back to Cambodia

  • NagaWorld casino sees net profit of more than $390M last year

    Phnom Penh’s NagaWorld casino posted a 53 per cent net profit increase last year at $390.6 million, a sum which is almost equal to the combined net profit of all Cambodian commercial banks in 2017. NagaWorld’s parent company, NagaCorp Ltd, is listed on the Hong Kong

  • US Embassy urged to stop ‘disrespecting sovereignty’

    The Ministry of Foreign Affairs and International Cooperation called on the US Embassy in Phnom Penh on Saturday to respect the Vienna Convention on Diplomatic Relations after it called former opposition leader Kem Sokha “an innocent man” – a move deemed to be “disrespecting Cambodia’s