Logo of Phnom Penh Post newspaper Phnom Penh Post - Economy grows on strength of exports, tourism and agriculture

Economy grows on strength of exports, tourism and agriculture

Content image - Phnom Penh Post
Tourists take photos at Siem Reap province’s Angkor Park. Hong Menea

Economy grows on strength of exports, tourism and agriculture

The Cambodian economic growth is projected to accelerate slightly to 6.9 percent in 2018, compared with 6.8 percent in 2017, buoyed by a rebound in textile and apparel exports as well as tourism and agriculture, says a new World Bank report.

However, the group said risks remain with potential election-related uncertainty and periodic jolts of protectionism escalating trade disputes between the world’s largest trading nations.

The latest Cambodia Economic Update (CEU), launched on Thursday, said rising government spending and favourable global conditions, including robust demand in advanced economies, are expected to underpin Cambodia’s high growth trajectoryInguna Dobraja, World Bank Country Manager for Cambodia said, “investing in people is the best for a more prosperous future”.

“To maintain strong growth, it is essential that Cambodia invests more in education and skills training while addressing the constraints facing small and medium businesses”, he said.

Risks remain, however, and they include erosion of export competitiveness due to rapidly rising real wages, a buildup of vulnerabilities from a prolonged real estate and construction boom, potential election-related uncertainty, and periodic jolts of protectionism and escalating trade disputes between the world’s largest trading countries, according to the report.

The report noted Cambodia can diversify growth and create more jobs by reducing the costs of company formalisation, operation and financing.

Tourist arrivals accelerated to 11.8 percent in 2017, compared with 5 percent in 2016, thanks to the authorities’ efforts to establish more regional flights, including to China, an important market for tourism.

Sinan Thourn, president of Cambodian Tourism Federation and the chairman of Pacific Asia Travel Association (PATA), said the number of arriving tourists in the last four months of this year did not increase. However, the quantity of Chinese tourists grew.

“If we look at the market share it is not like 2016 and 2017 [when tourism grew overall],” Thourn said.

While he was optimistic over the upcoming elections, Sinan also expressed some concerns.

“I don’t have any pessimism the election will deter tourists,” he claimed, adding that, “we know the politicians in our country always fight each other, but it never effects the tourism sector; it is just normal”.

However, he expressed concerns if the EU or US were to take any action.

“What I am worried about is that the EU and US will look at Cambodia in a different way, or, if they put a travel ban on the Kingdom it will impact tourist arrivals,” he said. “However it is just a small factor as Chinese tourists now lead.”

While the report said the growth in the construction sector is an important driver of growth and a creator of jobs, it also recommends that Cambodia closely monitor the construction and real estate boom by developing macro-prudential policies to help reduce the scope for speculative activities.

The agriculture sector also rebounded, with the expansion of rice and rubber plantations and the gradual recovery of agricultural commodity prices, according to the report.

MOST VIEWED

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Businesses in capital told to get travel permit amid lockdown through One Window Service

    The Phnom Penh Municipal Administration has issued guidelines on how to get travel permission for priority groups during the lockdown of Phnom Penh, directing private institutions to apply through the municipality's One Window Service and limit their staff to a mere two per cent. In

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Ministry names types of business permitted amid lockdown

    The Ministry of Labour and Vocational Training singled out 11 types of business that are permitted to operate during the lockdown of Phnom Penh and Takmao town, which run through April 28. Those include (1) food-processing enterprises and slaughterhouses; (2) providers of public services such as firefighting, utility and